Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing of a Proposed Rule Change To Accommodate Exchange Listing and Trading of Options-Linked Securities, 34270-34273 [2020-11920]

Download as PDF 34270 Federal Register / Vol. 85, No. 107 / Wednesday, June 3, 2020 / Notices C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve or disapprove the proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments 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– NYSEArca–2020–48 on the subject line. lotter on DSK9F5VC42PROD with NOTICES 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–NYSEArca–2020–48. 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 18:35 Jun 02, 2020 Jkt 250001 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.33 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–11919 Filed 6–2–20; 8:45 am] 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: VerDate Sep<11>2014 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–NYSEArca–2020–48 and should be submitted on or before June 24, 2020. BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–88968; File No. SR– CboeBZX–2020–042] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing of a Proposed Rule Change To Accommodate Exchange Listing and Trading of Options-Linked Securities May 28, 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 May 15, 2020, Cboe BZX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BZX’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 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 amend Exchange Rule 14.11(d) (‘‘Securities Linked to the Performance of Indexes and Commodities (Including 33 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00111 Fmt 4703 Sfmt 4703 Currencies)’’) to accommodate Exchange listing and trading of Options-Linked Securities. 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. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Exchange Rule 14.11(d) provides for Exchange listing and trading of Securities Linked to the Performance of Indexes and Commodities (Including Currencies) (‘‘Linked Securities’’).3 The Exchange proposes to amend Rule 14.11(d) to add Options-Linked Securities to the type of Linked Securities permitted to list and trade on the Exchange. The proposed amendment would include Options-Linked Securities in the list of Linked-Securities set forth in paragraph (d) of Rule 14.11. Additionally, the proposal would provide that the payment at maturity with respect to Options-Linked Securities is based on the performance of U.S. exchange-traded options on any one or combination of the following: (a) Index Fund Shares; (b) Managed Fund Shares, (c) Exchange-Traded Fund Shares; (d) Linked Securities; (e) securities defined in Rule 14.11; (f) the S&P 100 Index, the S&P 500 Index, the Nasdaq 100 Index, the Dow Jones Industrial Average, the MSCI EAFE Index, the MSCI Emerging Markets 3 Rule 14.11(d) currently accommodates Exchange listing and trading of Equity Index-Linked Securities, Commodity-Linked Securities, Fixed Income Index-Linked Securities, Futures-Linked Securities, and Multifactor Index-Linked Securities (collectively referred to as ‘‘Linked Securities’’). E:\FR\FM\03JNN1.SGM 03JNN1 lotter on DSK9F5VC42PROD with NOTICES Federal Register / Vol. 85, No. 107 / Wednesday, June 3, 2020 / Notices Index, the NYSE FANG Index, the Russell 2000 Index, the Russell 1000 Index, the Russell 1000 Growth Index, the Russell 1000 Value Index, the Cboe Volatility Index, Communication Services Select Sector Index, the Consumer Discretionary Select Sector Index, the Consumer Staples Select Sector Index, the Energy Select Sector Index, the Financial Select Sector Index, the Health Care Select Sector Index, the Industrial Select Sector Index, the Materials Select Sector Index, the Real Estate Select Sector Index, the Technology Select Sector Index, or the Utilities Select Sector Index; or (g) a basket or index of any of the foregoing (an ‘‘Options Reference Asset’’). The proposal would also include Options Reference Assets as a Multifactor Reference Asset, which would result in Options-Linked Securities as being included as Multifactor Index-Linked Securities. The proposal would move existing Rule 14.11(d)(2)(K)(v) (Multifactor Index-Linked Securities Listings Standards) to Rule 14.11(d)(2)(K)(vi), and would set forth the Option-Linked Securities Listing Standards in Rule 14.11(d)(2)(K)(v). Proposed Rule 14.11(d)(2)(K)(v)(a) provides that Option-Linked Securities must meet both of the following initial listing criteria: (1) The value of the Options Reference Asset must be calculated and widely disseminated by one or more major market data vendors on at least a 15-second basis during the Exchange’s regular market session; and (2) in the case of Options-Linked Securities that are periodically redeemable, the indicative value of the subject Options Linked Securities must be calculated and widely disseminated by the Exchange or one or more major market data vendors on at least a 15-second basis during the Exchange’s regular market session. Proposed Rule 14.11(d)(2)(K)(v)(b) provides that Option-Linked Securities must meet the following continued listing criteria: (1) The Exchange will consider the suspension of trading in, and will initiate delisting proceedings pursuant to Rule 14.12 if any of the initial listing criteria described above are not continuously maintained; and (2) the Exchange will consider the suspension of trading in, and will initiate delisting proceedings pursuant to Rule 14.12 under any of the following circumstances: (A) If the aggregate market value or the principal amount of the Options-Linked Securities publicly held is less than $400,000; (B) if an interruption to the dissemination of the value of the Options Reference Asset VerDate Sep<11>2014 18:35 Jun 02, 2020 Jkt 250001 persists past the trading day in which it occurred or is no longer calculated or available and a new Options Reference Asset is substituted, unless the new Options Reference Asset meets the requirements of this Rule 14.11(d)(2)(K); or (C) if such other event shall occur or condition exists which in the opinion of the Exchange makes further dealings on the Exchange inadvisable.4 With respect to equity securities underlying Options Reference Assets, the Exchange notes that Index Fund Shares,5 Managed Fund Shares,6 Exchange-Traded Fund Shares,7 and Linked Securities and securities as defined in Rule 14.11 are subject to initial and continued listing criteria under applicable Exchange Rules as approved by the Commission. In addition, the Commission has approved or issued a notice of effectiveness to permit listing on a national securities exchange of securities based on certain Indexes.8 Further, Index Fund Shares, Managed Fund Shares, ExchangeTraded Fund Shares, Linked Securities or securities defined in Rule 14.11 based on the Indexes have been listed on national securities exchanges under generic listing criteria applicable to such securities. With respect to options on the Indexes, options on all of the Indexes are currently traded on U.S. options exchanges. Finally, all Options-Linked Securities listed pursuant to Exchange Rule 14.11(d) would be included within the 4 Proposed Rule 14.11(d)(2)(K)(v)(b) is substantially the same as existing Rules 14.11(d)(2)(K)(ii)(b), 14.11(d)(2)(K)(iii)(c), and 14.11(d)(2)(K)(iv)(c). 5 See Exchange Rule 14.11(c). 6 See Exchange Rule 14.11(i). 7 See Exchange Rule 14.11(l). 8 See, e.g., Securities Exchange Act Release Nos. 31591 (December 11, 1992), 57 FR 60253 (December 18, 1992) (SR–Amex–92–18) (approving the listing and trading of Portfolio Depositary Receipts based on the S&P 500 Index); 39525 (January 8, 1998), 63 FR 2438 (January 15, 1998) (SR–Amex–97–29) (approving the listing and trading of DIAMONDS Trust Units, Portfolio Depositary Receipts based on the Dow Jones Industrial Average); 39011 (September 3, 1997), 62 FR 47840 (September 11, 1997) (SR–CBOE–97–26) (approving the listing and trading of options on the Dow Jones Industrial Average); 19907 (June 24, 1983), 48 FR 30814 (July 5, 1983) (SR–CBOE–83–08) (approving the listing and trading of options on the S&P 500 Index on the CBOE); 41119 (February 26, 1999), 64 FR 11510 (March 9, 1999) (SR–Amex–98–34) (Order Approving and Notice of Filing and Order Granting Accelerated Approval of Amendment Nos. 3 and 4 to the Proposed Rule Change Relating to the Listing and Trading of Shares of the Nasdaq–100 Trust); 87437 (October 31, 2019), 84 FR 59900 (November 6, 2019) (SR–NYSEArca–2019–62) (Notice of Filing of Amendment No. 1, and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, Relating to the Listing and Trading of Shares of the Innovator MSCI EAFE Power Buffer ETFs and Innovator MSCI Emerging Markets Power Buffer ETFs under NYSE Arca Rule 8.600–E). PO 00000 Frm 00112 Fmt 4703 Sfmt 4703 34271 definition of securities as such terms are used in the Exchange’s rules and, as such, are subject to Exchange rules and procedures that currently govern the trading of securities on the Exchange. The Exchange believes that the proposed standards would continue to ensure transparency surrounding the listing process for Linked Securities. The Exchange also believes that the standards for listing and trading Options-Linked Securities are reasonably designed to promote a fair and orderly market for such securities. The proposed addition of Options Reference Assets, as described above, would also work in conjunction with the initial and continued listing criteria related to surveillance procedures and trading guidelines for Linked Securities. The Exchange believes that its surveillance procedures are adequate to properly monitor the trading of OptionsLinked Securities in all trading sessions and to deter and detect violations of Exchange Rules. The issuer of a series of Options-Linked Securities will be required to comply with Rule 10A–3 under the Act 9 for the initial and continued listing of Linked Securities, as provided in Exchange Rule 14.11(d)(2)(F). The Exchange notes that the proposed change is not intended to amend any other component or requirement of Exchange Rule 14.11(d). Quotation and last sale information for Options-Linked Securities, Index Fund Shares, Managed Fund Shares, Exchange-Traded Fund Shares, Linked Securities, and securities defined in Rule 14.11 are available via the Consolidated Tape Association (‘‘CTA’’) high speed line. Quotation and last sale information for such securities also will be available from the exchange on which they are listed. Quotation and last sale information for options on Index Fund Shares, Managed Fund Shares, Exchange-Traded Fund Shares, Linked Securities, securities defined in Rule 14.11 and the Indexes will be available via the Options Price Reporting Authority and major market data vendors. Information regarding values of the Indexes is available from major market data vendors. The Exchange believes that the proposed rule change will provide investors with the ability to better diversify and hedge their portfolios using an exchange-listed security without having to trade directly in the underlying options contracts, and will facilitate the listing and trading of additional Linked Securities that will enhance competition among market 9 17 E:\FR\FM\03JNN1.SGM CFR 240.10A–3. 03JNN1 34272 Federal Register / Vol. 85, No. 107 / Wednesday, June 3, 2020 / Notices lotter on DSK9F5VC42PROD with NOTICES participants, to the benefit of investors and the marketplace. 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.10 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 11 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) 12 requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. With respect to equity securities underlying Options Reference Assets, the Exchange notes that Index Fund Shares, Managed Fund Shares, Exchange-Traded Fund Shares, Linked Securities and securities defined in Rule 14.11 are subject to Exchange initial and continued listing criteria under applicable Exchange rules as approved by the Commission. In addition, the Commission has approved or issued a notice of effectiveness to permit listing on a national securities exchange of securities based on certain Indexes.13 With respect to options on the Indexes, options on all of the Indexes are currently traded on U.S. options exchanges. All options included in an Options Reference Asset will be U.S. exchange-traded. Any Options-Linked Securities would be required to meet the following initial listing criteria in proposed Rule 14.11(d)(2)(K)(v)(a): (1) The value of the Options Reference Asset must be calculated and widely disseminated by one or more major market data vendors on at least a 15-second basis during the Exchange’s regular market session; and (2) in the case of Options-Linked Securities that are periodically 10 15 11 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 12 Id. 13 Supra note 8. VerDate Sep<11>2014 18:35 Jun 02, 2020 Jkt 250001 redeemable, the indicative value of the subject Options Linked Securities must be calculated and widely disseminated by the Exchange or one or more major market data vendors on at least a 15second basis during the Exchange’s regular market session. Options-Linked Securities also will be subject to the continued listing criteria in proposed Rule 14.11(d)(2)(K)(v)(b) as described above. Finally, all Options-Linked Securities listed pursuant to Exchange Rule 14.11(d) would be included within the definition of ‘‘security’’ or ‘‘securities’’ as such terms are used in the Exchange’s rules and, as such, are subject to Exchange rules and procedures that currently govern the trading of securities on the Exchange. The Exchange believes that the proposed standards would continue to ensure transparency surrounding the listing process for Linked Securities. The Exchange also believes that the standards for listing and trading Options-Linked Securities are reasonably designed to promote a fair and orderly market for such securities. The proposed addition of Options Reference Assets, as described above, would also work in conjunction with the initial and continued listing criteria related to surveillance procedures and trading guidelines for Linked Securities. The Exchange believes that its surveillance procedures are adequate to properly monitor the trading of Options Linked Securities in all trading sessions and to deter and detect violations of Exchange rules. Trading in the securities may be halted under the conditions specified in Exchange Rule 14.11(d)(2)(H). The Exchange believes that the proposed rule change will provide investors with the ability to better diversify and hedge their portfolios using an exchange listed security without having to trade directly in the underlying options contracts, and will facilitate the listing and trading of additional Linked Securities that will enhance competition among market participants, to the benefit of investors and the marketplace. 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 will facilitate the listing and trading of additional Linked Securities that will enhance competition among market participants, to the benefit of investors and the marketplace. PO 00000 Frm 00113 Fmt 4703 Sfmt 4703 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The [sic] 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 Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the Exchange consents, the Commission will: A. By order approve or disapprove such proposed rule change, or B. institute proceedings to determine whether the proposed rule change should be 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 SRCboeBZX–2020–042 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–2020–042. 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 E:\FR\FM\03JNN1.SGM 03JNN1 Federal Register / Vol. 85, No. 107 / Wednesday, June 3, 2020 / Notices 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–2020–042, and should be submitted on or before June 24, 2020. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–11920 Filed 6–2–20; 8:45 am] BILLING CODE 8011–01–P DEPARTMENT OF STATE [Public Notice 11114] 30-Day Notice of Proposed Information Collection: Birth Affidavit Notice of request for public comment and submission to OMB of proposed collection of information. ACTION: The Department of State has submitted the information collection described below to the Office of Management and Budget (OMB) for approval. In accordance with the Paperwork Reduction Act of 1995 we are requesting comments on this collection from all interested individuals and organizations. The purpose of this Notice is to allow 30 days for public comment. DATES: Submit comments up to July 6, 2020. ADDRESSES: Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to www.reginfo.gov/public/do/ PRAMain. Find this particular information collection by selecting ‘‘Currently under 30-day Review—Open for Public Comments’’ or by using the search function. SUPPLEMENTARY INFORMATION: • Title of Information Collection: Birth Affidavit. lotter on DSK9F5VC42PROD with NOTICES SUMMARY: 14 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 18:35 Jun 02, 2020 Jkt 250001 • OMB Control Number: 1405–0132. • Type of Request: Revision of a Currently Approved Collection. • Originating Office: Department of State, Bureau of Consular Affairs, Passport Services, Office of Program Management and Operational Support (CA/PPT/S/PMO/CR). • Form Number: DS–10. • Respondents: Individuals. • Estimated Number of Respondents: 5,183. • Estimated Number of Responses: 5,183. • Average Time per Response: 40 minutes. • Total Estimated Burden Time: 3,455 hours. • Frequency: On Occasion. • Obligation to Respond: Required to Obtain a Benefit. We are soliciting public comments to permit the Department to: • Evaluate whether the proposed information collection is necessary for the proper functions of the Department. • Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used. • Enhance the quality, utility, and clarity of the information to be collected. • Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology. Please note that comments submitted in response to this Notice are public record. Before including any detailed personal information, you should be aware that your comments as submitted, including your personal information, will be available for public review. Abstract of Proposed Collection Form DS–10, Birth Affidavit, is submitted in conjunction with an application for a U.S. passport, and is used by Passport Services to collect information for the purpose of establishing the U.S. nationality of a passport applicant who has not submitted an acceptable United States birth certificate with his/her passport application. The Secretary of State is authorized to issue U.S. passports under 22 U.S.C. 211a et seq., 8 U.S.C. 1104, and Executive Order 11295 (August 5, 1966). Pursuant to 22 U.S.C. 212 and 22 CFR 51.2, only U.S. nationals may be issued a U.S. passport. Most passport applicants establish U.S. nationality by providing a birth certificate that lists a place of birth within the United States or its outlying possessions (currently American Samoa and Swains Island). PO 00000 Frm 00114 Fmt 4703 Sfmt 4703 34273 Some applicants, however, may have been born in the United States (and subject to its jurisdiction), but were never issued a birth certificate. Form DS–10 is a form affidavit for completion by a witness to the birth of such an applicant; it collects information relevant to establishing the identity of the affiant, and the birth circumstances of the passport applicant. If credible, the affidavit may permit the applicant to show U.S. nationality based on the applicant’s birth in the United States, despite never having been issued a U.S. birth certificate. We use the information collected on the person completing the affidavit to confirm that individual’s identity, which is relevant to confirming his or her relationship to the applicant and in assessing the likelihood that the affiant has personal knowledge of the facts of the applicant’s birth. Methodology When needed by an applicant for a passport, a Birth Affidavit is either provided by the Department or downloaded from the Department’s website and filled out by the affiant. It must be signed in the presence of a passport agent, acceptance agent, or notary public. Zachary Parker, Director. [FR Doc. 2020–11965 Filed 6–2–20; 8:45 am] BILLING CODE 4710–06–P SURFACE TRANSPORTATION BOARD [Docket No. FD 36404] Iowa Northern Railway Company— Acquisition Exemption—D&W Railroad, LLC Iowa Northern Railway Company (Iowa Northern), a Class III rail carrier, has filed a verified notice of exemption under 49 CFR 1150.41 to acquire from D&W Railroad, LLC (D&W) approximately 23.40 miles of rail line, as follows: (i) The rail line from milepost 332.0 at Dewar, Iowa, to milepost 354.5 (end of line), including the most easterly rail line and right of way, known as the Main Line, which is located adjacent to the Oelwein Yard in Oelwein, Iowa, (ii) the rail line from milepost 245.58 to milepost 245.0 at Oelwein, and (iii) the rail line that comprises 0.32 miles of wye track at Oelwein that connects the so-called ‘‘East Leg’’ track to the Main Line track (collectively, the Line). The verified notice states that Iowa Northern has been serving as the operator on the Line since September 2003. See also Iowa N. Ry.—Operation E:\FR\FM\03JNN1.SGM 03JNN1

Agencies

[Federal Register Volume 85, Number 107 (Wednesday, June 3, 2020)]
[Notices]
[Pages 34270-34273]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-11920]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88968; File No. SR-CboeBZX-2020-042]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing of a Proposed Rule Change To Accommodate Exchange Listing and 
Trading of Options-Linked Securities

May 28, 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 May 15, 2020, Cboe BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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 
amend Exchange Rule 14.11(d) (``Securities Linked to the Performance of 
Indexes and Commodities (Including Currencies)'') to accommodate 
Exchange listing and trading of Options-Linked Securities. 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.

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

1. Purpose
    Exchange Rule 14.11(d) provides for Exchange listing and trading of 
Securities Linked to the Performance of Indexes and Commodities 
(Including Currencies) (``Linked Securities'').\3\ The Exchange 
proposes to amend Rule 14.11(d) to add Options-Linked Securities to the 
type of Linked Securities permitted to list and trade on the Exchange.
---------------------------------------------------------------------------

    \3\ Rule 14.11(d) currently accommodates Exchange listing and 
trading of Equity Index-Linked Securities, Commodity-Linked 
Securities, Fixed Income Index-Linked Securities, Futures-Linked 
Securities, and Multifactor Index-Linked Securities (collectively 
referred to as ``Linked Securities'').
---------------------------------------------------------------------------

    The proposed amendment would include Options-Linked Securities in 
the list of Linked-Securities set forth in paragraph (d) of Rule 14.11. 
Additionally, the proposal would provide that the payment at maturity 
with respect to Options-Linked Securities is based on the performance 
of U.S. exchange-traded options on any one or combination of the 
following: (a) Index Fund Shares; (b) Managed Fund Shares, (c) 
Exchange-Traded Fund Shares; (d) Linked Securities; (e) securities 
defined in Rule 14.11; (f) the S&P 100 Index, the S&P 500 Index, the 
Nasdaq 100 Index, the Dow Jones Industrial Average, the MSCI EAFE 
Index, the MSCI Emerging Markets

[[Page 34271]]

Index, the NYSE FANG Index, the Russell 2000 Index, the Russell 1000 
Index, the Russell 1000 Growth Index, the Russell 1000 Value Index, the 
Cboe Volatility Index, Communication Services Select Sector Index, the 
Consumer Discretionary Select Sector Index, the Consumer Staples Select 
Sector Index, the Energy Select Sector Index, the Financial Select 
Sector Index, the Health Care Select Sector Index, the Industrial 
Select Sector Index, the Materials Select Sector Index, the Real Estate 
Select Sector Index, the Technology Select Sector Index, or the 
Utilities Select Sector Index; or (g) a basket or index of any of the 
foregoing (an ``Options Reference Asset''). The proposal would also 
include Options Reference Assets as a Multifactor Reference Asset, 
which would result in Options-Linked Securities as being included as 
Multifactor Index-Linked Securities.
    The proposal would move existing Rule 14.11(d)(2)(K)(v) 
(Multifactor Index-Linked Securities Listings Standards) to Rule 
14.11(d)(2)(K)(vi), and would set forth the Option-Linked Securities 
Listing Standards in Rule 14.11(d)(2)(K)(v). Proposed Rule 
14.11(d)(2)(K)(v)(a) provides that Option-Linked Securities must meet 
both of the following initial listing criteria: (1) The value of the 
Options Reference Asset must be calculated and widely disseminated by 
one or more major market data vendors on at least a 15-second basis 
during the Exchange's regular market session; and (2) in the case of 
Options-Linked Securities that are periodically redeemable, the 
indicative value of the subject Options Linked Securities must be 
calculated and widely disseminated by the Exchange or one or more major 
market data vendors on at least a 15-second basis during the Exchange's 
regular market session. Proposed Rule 14.11(d)(2)(K)(v)(b) provides 
that Option-Linked Securities must meet the following continued listing 
criteria: (1) The Exchange will consider the suspension of trading in, 
and will initiate delisting proceedings pursuant to Rule 14.12 if any 
of the initial listing criteria described above are not continuously 
maintained; and (2) the Exchange will consider the suspension of 
trading in, and will initiate delisting proceedings pursuant to Rule 
14.12 under any of the following circumstances: (A) If the aggregate 
market value or the principal amount of the Options-Linked Securities 
publicly held is less than $400,000; (B) if an interruption to the 
dissemination of the value of the Options Reference Asset persists past 
the trading day in which it occurred or is no longer calculated or 
available and a new Options Reference Asset is substituted, unless the 
new Options Reference Asset meets the requirements of this Rule 
14.11(d)(2)(K); or (C) if such other event shall occur or condition 
exists which in the opinion of the Exchange makes further dealings on 
the Exchange inadvisable.\4\
---------------------------------------------------------------------------

    \4\ Proposed Rule 14.11(d)(2)(K)(v)(b) is substantially the same 
as existing Rules 14.11(d)(2)(K)(ii)(b), 14.11(d)(2)(K)(iii)(c), and 
14.11(d)(2)(K)(iv)(c).
---------------------------------------------------------------------------

    With respect to equity securities underlying Options Reference 
Assets, the Exchange notes that Index Fund Shares,\5\ Managed Fund 
Shares,\6\ Exchange-Traded Fund Shares,\7\ and Linked Securities and 
securities as defined in Rule 14.11 are subject to initial and 
continued listing criteria under applicable Exchange Rules as approved 
by the Commission. In addition, the Commission has approved or issued a 
notice of effectiveness to permit listing on a national securities 
exchange of securities based on certain Indexes.\8\ Further, Index Fund 
Shares, Managed Fund Shares, Exchange-Traded Fund Shares, Linked 
Securities or securities defined in Rule 14.11 based on the Indexes 
have been listed on national securities exchanges under generic listing 
criteria applicable to such securities. With respect to options on the 
Indexes, options on all of the Indexes are currently traded on U.S. 
options exchanges.
---------------------------------------------------------------------------

    \5\ See Exchange Rule 14.11(c).
    \6\ See Exchange Rule 14.11(i).
    \7\ See Exchange Rule 14.11(l).
    \8\ See, e.g., Securities Exchange Act Release Nos. 31591 
(December 11, 1992), 57 FR 60253 (December 18, 1992) (SR-Amex-92-18) 
(approving the listing and trading of Portfolio Depositary Receipts 
based on the S&P 500 Index); 39525 (January 8, 1998), 63 FR 2438 
(January 15, 1998) (SR-Amex-97-29) (approving the listing and 
trading of DIAMONDS Trust Units, Portfolio Depositary Receipts based 
on the Dow Jones Industrial Average); 39011 (September 3, 1997), 62 
FR 47840 (September 11, 1997) (SR-CBOE-97-26) (approving the listing 
and trading of options on the Dow Jones Industrial Average); 19907 
(June 24, 1983), 48 FR 30814 (July 5, 1983) (SR-CBOE-83-08) 
(approving the listing and trading of options on the S&P 500 Index 
on the CBOE); 41119 (February 26, 1999), 64 FR 11510 (March 9, 1999) 
(SR-Amex-98-34) (Order Approving and Notice of Filing and Order 
Granting Accelerated Approval of Amendment Nos. 3 and 4 to the 
Proposed Rule Change Relating to the Listing and Trading of Shares 
of the Nasdaq-100 Trust); 87437 (October 31, 2019), 84 FR 59900 
(November 6, 2019) (SR-NYSEArca-2019-62) (Notice of Filing of 
Amendment No. 1, and Order Granting Accelerated Approval of a 
Proposed Rule Change, as Modified by Amendment No. 1, Relating to 
the Listing and Trading of Shares of the Innovator MSCI EAFE Power 
Buffer ETFs and Innovator MSCI Emerging Markets Power Buffer ETFs 
under NYSE Arca Rule 8.600-E).
---------------------------------------------------------------------------

    Finally, all Options-Linked Securities listed pursuant to Exchange 
Rule 14.11(d) would be included within the definition of securities as 
such terms are used in the Exchange's rules and, as such, are subject 
to Exchange rules and procedures that currently govern the trading of 
securities on the Exchange.
    The Exchange believes that the proposed standards would continue to 
ensure transparency surrounding the listing process for Linked 
Securities. The Exchange also believes that the standards for listing 
and trading Options-Linked Securities are reasonably designed to 
promote a fair and orderly market for such securities. The proposed 
addition of Options Reference Assets, as described above, would also 
work in conjunction with the initial and continued listing criteria 
related to surveillance procedures and trading guidelines for Linked 
Securities.
    The Exchange believes that its surveillance procedures are adequate 
to properly monitor the trading of Options-Linked Securities in all 
trading sessions and to deter and detect violations of Exchange Rules. 
The issuer of a series of Options-Linked Securities will be required to 
comply with Rule 10A-3 under the Act \9\ for the initial and continued 
listing of Linked Securities, as provided in Exchange Rule 
14.11(d)(2)(F). The Exchange notes that the proposed change is not 
intended to amend any other component or requirement of Exchange Rule 
14.11(d).
---------------------------------------------------------------------------

    \9\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    Quotation and last sale information for Options-Linked Securities, 
Index Fund Shares, Managed Fund Shares, Exchange-Traded Fund Shares, 
Linked Securities, and securities defined in Rule 14.11 are available 
via the Consolidated Tape Association (``CTA'') high speed line. 
Quotation and last sale information for such securities also will be 
available from the exchange on which they are listed. Quotation and 
last sale information for options on Index Fund Shares, Managed Fund 
Shares, Exchange-Traded Fund Shares, Linked Securities, securities 
defined in Rule 14.11 and the Indexes will be available via the Options 
Price Reporting Authority and major market data vendors. Information 
regarding values of the Indexes is available from major market data 
vendors.
    The Exchange believes that the proposed rule change will provide 
investors with the ability to better diversify and hedge their 
portfolios using an exchange-listed security without having to trade 
directly in the underlying options contracts, and will facilitate the 
listing and trading of additional Linked Securities that will enhance 
competition among market

[[Page 34272]]

participants, to the benefit of investors and the marketplace.
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.\10\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \11\ 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) \12\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
    \12\ Id.
---------------------------------------------------------------------------

    With respect to equity securities underlying Options Reference 
Assets, the Exchange notes that Index Fund Shares, Managed Fund Shares, 
Exchange-Traded Fund Shares, Linked Securities and securities defined 
in Rule 14.11 are subject to Exchange initial and continued listing 
criteria under applicable Exchange rules as approved by the Commission. 
In addition, the Commission has approved or issued a notice of 
effectiveness to permit listing on a national securities exchange of 
securities based on certain Indexes.\13\ With respect to options on the 
Indexes, options on all of the Indexes are currently traded on U.S. 
options exchanges. All options included in an Options Reference Asset 
will be U.S. exchange-traded.
---------------------------------------------------------------------------

    \13\ Supra note 8.
---------------------------------------------------------------------------

    Any Options-Linked Securities would be required to meet the 
following initial listing criteria in proposed Rule 
14.11(d)(2)(K)(v)(a): (1) The value of the Options Reference Asset must 
be calculated and widely disseminated by one or more major market data 
vendors on at least a 15-second basis during the Exchange's regular 
market session; and (2) in the case of Options-Linked Securities that 
are periodically redeemable, the indicative value of the subject 
Options Linked Securities must be calculated and widely disseminated by 
the Exchange or one or more major market data vendors on at least a 15-
second basis during the Exchange's regular market session. Options-
Linked Securities also will be subject to the continued listing 
criteria in proposed Rule 14.11(d)(2)(K)(v)(b) as described above. 
Finally, all Options-Linked Securities listed pursuant to Exchange Rule 
14.11(d) would be included within the definition of ``security'' or 
``securities'' as such terms are used in the Exchange's rules and, as 
such, are subject to Exchange rules and procedures that currently 
govern the trading of securities on the Exchange.
    The Exchange believes that the proposed standards would continue to 
ensure transparency surrounding the listing process for Linked 
Securities. The Exchange also believes that the standards for listing 
and trading Options-Linked Securities are reasonably designed to 
promote a fair and orderly market for such securities. The proposed 
addition of Options Reference Assets, as described above, would also 
work in conjunction with the initial and continued listing criteria 
related to surveillance procedures and trading guidelines for Linked 
Securities. The Exchange believes that its surveillance procedures are 
adequate to properly monitor the trading of Options Linked Securities 
in all trading sessions and to deter and detect violations of Exchange 
rules. Trading in the securities may be halted under the conditions 
specified in Exchange Rule 14.11(d)(2)(H).
    The Exchange believes that the proposed rule change will provide 
investors with the ability to better diversify and hedge their 
portfolios using an exchange listed security without having to trade 
directly in the underlying options contracts, and will facilitate the 
listing and trading of additional Linked Securities that will enhance 
competition among market participants, to the benefit of investors and 
the marketplace.

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 
will facilitate the listing and trading of additional Linked Securities 
that will enhance competition among market participants, to the benefit 
of investors and the marketplace.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The [sic] 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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission will:
    A. By order approve or disapprove such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule 
change should be 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-2020-042 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-2020-042. 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

[[Page 34273]]

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-2020-042, and should 
be submitted on or before June 24, 2020.
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-11920 Filed 6-2-20; 8:45 am]
 BILLING CODE 8011-01-P
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.