Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 5.24, 43938-43941 [2020-15550]

Download as PDF 43938 Federal Register / Vol. 85, No. 139 / Monday, July 20, 2020 / Notices 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: • 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–2020–59 on the subject line. Paper Comments BILLING CODE 8011–01–P [Release No. 34–89307; File No. SR–CBOE– 2020–066] Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 5.24 July 14, 2020. • 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–2020–59. 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–NYSEArca–2020–59 and should be submitted on or before August 10, 2020. 18:30 Jul 17, 2020 [FR Doc. 2020–15553 Filed 7–17–20; 8:45 am] SECURITIES AND EXCHANGE COMMISSION Electronic Comments VerDate Sep<11>2014 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.43 J. Matthew DeLesDernier, Assistant Secretary. Jkt 250001 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 July 2, 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 amend Rule 5.24. The text of the proposed rule change is provided below. (additions are italicized; deletions are [bracketed]) * * * * * Rules of Cboe Exchange, Inc. * * * * * Rule 5.24. Disaster Recovery (a)–(d) No change. (e) Loss of Trading Floor. If the Exchange trading floor becomes inoperable, the Exchange will continue to operate in a screen-based only environment using a floorless configuration of the System that is operational while the trading floor facility is inoperable. The Exchange will operate using this configuration only until the Exchange’s trading floor facility is operational. Open PO 00000 43 17 CFR 200.30–3(a)(12). 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). 1 15 Frm 00133 Fmt 4703 Sfmt 4703 outcry trading will not be available in the event the trading floor becomes inoperable, except in accordance with paragraph (2) below and pursuant to Rule 5.26, as applicable. (1) Applicable Rules. In the event that the trading floor becomes inoperable, trading will be conducted pursuant to all applicable System Rules, except that open outcry Rules will not be in force, including but not limited to the Rules (or applicable portions of the Rules) in Chapter 5, Section G, and as follows (subparagraphs (A) through (E) will be effective until [June 30]August 31, 2020): * * * * * The text of the proposed rule change is also available on the Exchange’s website (https://www.cboe.com/ AboutCBOE/CBOELegal RegulatoryHome.aspx), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these 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 amend Rule 5.24 regarding the Exchange’s business continuity and disaster recovery plans. Rule 5.24 describes which Trading Permit Holders (‘‘TPHs’’) are required to connect to the Exchange’s backup systems as well as certain actions the Exchange may take as part of its business continuity plans so that it may maintain fair and orderly markets if unusual circumstances occurred that could impact the Exchange’s ability to conduct business. This includes what actions the Exchange would take if its trading floor became inoperable. Specifically, Rule 5.24(e) states if the Exchange trading floor becomes inoperable, the Exchange will continue to operate in a screenbased only environment using a floorless configuration of the System that is operational while the trading floor facility is inoperable. The Exchange would operate using that E:\FR\FM\20JYN1.SGM 20JYN1 Federal Register / Vol. 85, No. 139 / Monday, July 20, 2020 / Notices configuration only until the Exchange’s trading floor facility became operational. Open outcry trading would not be available in the event the trading floor becomes inoperable.5 Rule 5.24(e)(1) currently states in the event that the trading floor becomes inoperable, trading will be conducted pursuant to all applicable System Rules, except that open outcry Rules would not be in force, including but not limited to the Rules (or applicable portions) in Chapter 5, Section G,6 and that all nontrading rules of the Exchange would continue to apply. The Exchange recently adopted several rule changes that would apply during a time in which the trading floor in inoperable, which are effective until June 30, 2020.7 The Exchange believes these rules were necessary to implement to maintain a fair and orderly market while the trading floor was not operable in order to create an all-electronic trading environment similar to the otherwise unavailable open outcry trading environment. As of March 16, 2020, the Exchange suspended open outcry trading to help prevent the spread of COVID–19.8 The trading floor remained closed until June 15, 2020. During the time when the trading floor was closed, the Exchange operated in an all-electronic trading environment and the temporary rules in Rule 5.24(e)(1) applied to that electronic trading environment. The Exchange believes that, while those temporary rules did not fully replicate open outcry trading, they allowed all-electronic trading to occur more similarly to open outcry trading.9 5 Pursuant to Rule 5.26, the Exchange may enter into a back-up trading arrangement with another exchange, which could allow the Exchange to use the facilities of a back-up exchange to conduct trading of certain of its products. The Exchange currently has no back-up trading arrangement in place with another exchange. 6 Chapter 5, Section G of the Exchange’s rulebook sets forth the rules and procedures for manual order handling and open outcry trading on the Exchange. 7 See Securities Exchange Act Release Nos. 88386 (March 13, 2020), 85 FR 15823 (March 19, 2020) (SR–CBOE–2020–019); 88447 (March 20, 2020), 85 FR 17129 (March 26, 2020) (SR–CBOE–2020–023); 88490 (March 26, 2020), 85 FR 18318 (April 1, 2020) (SR–CBOE–2020–026); 88530 (March 31, 2020), 85 FR 19182 (April 6, 2020) (SR–CBOE– 2020–031); and 88886 (May 15, 2020), 85 FR 31008 (May 21, 2020) (SR–CBOE–2020–047). 8 On March 11, 2020, the World Health Organization characterized COVID–19 as a pandemic and to slow the spread of the disease, federal and state officials implemented socialdistancing measures, placed significant limitations on large gatherings, limited travel, and closed nonessential businesses. 9 The Exchange continues to consider other enhancements to the all-electronic trading configuration that it believes may permit this configuration to further replicate the open outcry trading environment. The Exchange would submit VerDate Sep<11>2014 18:30 Jul 17, 2020 Jkt 250001 The trading floor is currently open for open outcry trading, and the Exchange is operating pursuant to its normal hybrid trading rules. The Exchange implemented numerous health and safety measures in connection with the reopening of the trading floor on June 15, 2020 to help protect the safety and welfare of the trading floor community and help prevent the continued spread of COVID–19.10 However, the Exchange recognizes the ongoing nature of the COVID–19 pandemic in the United States, which may cause the Exchange to once again close its trading floor to help prevent the continued spread of COVID–19. In the event the Exchange did close its trading floor again, the Exchange believes it would be necessary to again apply the recently adopted temporary rules in Rule 5.24(e)(1) to maintain a fair and orderly market while the trading floor was not operable in order to create an all-electronic trading environment similar to the otherwise unavailable open outcry trading environment. As noted above, Rule 5.24(e)(1) is effective only until June 30, 2020 (and the rules became inapplicable upon the reopening of the trading floor on June 15, 2020). Given the Exchange may believe it is appropriate to close the trading floor with little advanced notice and in a short timeframe to help protect the safety and welfare of the trading floor community, the Exchange proposes to extend the effectiveness of the temporary rules in Rule 5.24(e)(1) to August 31, 2020 (unless further extended). The Exchange believes this will permit the Exchange to as seamlessly as possible transition back to an all-electronic trading environment. The Exchange notes Rule 5.24(e)(1) will separate rule filings for any such proposed enhancements. The Exchange notes it recently submitted a separate rule filing to adopt a virtual trading floor, which the Exchange may determine to make available if the trading floor becomes inoperable (or is operating in a modified state). See Securities Exchange Act Release No. 89131 (June 23, 2020), 85 FR 38951 (June 29, 2020) (SR–CBOE– 2020–055). If the Commission approves that filing, and the trading floor subsequently becomes inoperable and the Exchange makes the virtual trading floor available, the temporary rules in Rule 5.24(e)(1) would not be in effect (the Exchange intends to submit a partial amendment to SR– CBOE–2020–055 to make that clear). Separately, the Exchange believes the temporary rules in Rule 5.24(e)(1) should be effective for a period of time while the virtual trading floor is available, the Exchange will submit a separately rule filing to propose that change. 10 See Exchange Notice C2020052601, Standards of Conduct related to the Reopening of the Cboe Options Trading Floor and COVID–19 (May 26, 2020), available at https://cdn.cboe.com/resources/ release_notes/2020/Standards-of-Conduct-relatedto-the-Reopening-of-the-Cboe-Options-TradingFloor-Notice-Final.pdf. PO 00000 Frm 00134 Fmt 4703 Sfmt 4703 43939 not apply to trading during times when the trading floor remains operable. Previously when the temporary provisions of Rule 5.24(e)(1) were in place, the Exchange’s Regulatory Division has continued its standard routine surveillance reviews for electronic trading and implemented a regulatory plan to surveil the rules in place in Rule 5.24(e)(1) when operating in a screen-based only environment. In the event the Exchange closes its trading floor again and the temporary provisions in Rule 5.24(e)(1) become applicable in an all-electronic trading environment, the Exchange’s Regulatory Division would reimplement that regulatory plan to surveil those rules. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the ‘‘Act’’) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.11 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 12 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) 13 requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. In particular, the Exchange believes the proposed rule change will remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, protect investors and the public interest by permitting the Exchange to as seamlessly as possible transition back to an all-electronic trading environment in the event the Exchange determines it is appropriate to again close its trading floor. The Exchange expects it would take this action if it believes necessary and appropriate to help protect the safety and welfare of the trading community. Such a determination may 11 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 12 15 13 Id. E:\FR\FM\20JYN1.SGM 20JYN1 43940 Federal Register / Vol. 85, No. 139 / Monday, July 20, 2020 / Notices occur with little advance notice, and closure of the trading floor may need to occur in a short time frame. The Exchange continues to believe the recent amendments to Rule 5.24(e)(1) allowed all-electronic trading to occur more similarly to open outcry trading while the trading floor was closed. The Exchange believes the proposed rule change is necessary and appropriate to provide TPHs with execution opportunities in an all-electronic trading environment for orders that generally execute in open outcry trading. Additionally, the proposed rule change will provide TPHs with an allelectronic trading environment to which they became accustomed when the trading floor was previously closed, and therefore will provide investors with consistent rules that apply when the Exchange operates in an all-electronic environment. The proposed rule change will provide investors with definitive knowledge of what rules will apply when the trading floor is closed. 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 is not intended as a competitive filing, but rather extends the effectiveness of temporary rules as part of the Exchange’s business continuity plans, which are intended to allow the Exchange to continue to maintain fair and orderly markets while the Exchange’s trading floor continues to be inoperable. 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 VerDate Sep<11>2014 18:30 Jul 17, 2020 Jkt 250001 19(b)(3)(A) of the Act 14 and Rule 19b– 4(f)(6) thereunder.15 A proposed rule change filed pursuant to Rule 19b–4(f)(6) under the Act 16 normally does not become operative for 30 days after the date of its filing. However, Rule 19b–4(f)(6)(iii) 17 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposed rule change may become operative immediately. The Exchange believes extension of the temporary rules put in place due to the ongoing COVID–19 pandemic will permit the Exchange to minimize disruptions in the market during a transition back to an allelectronic trading environment if the Exchange believes it is necessary and appropriate to help protect the safety and welfare of the trading community. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest as it will allow the temporary rules to continue with minimal interruption, thereby avoiding investor confusion that could result from an interruption in the effectiveness of the rules. Accordingly, the Commission hereby waives the operative delay and designates the proposed rule change operative upon filing.18 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change should be approved or disapproved. U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Commission has waived the five business day notification requirement for this proposed rule change. 16 17 CFR 240.19b–4(f)(6). 17 17 CFR 240.19b–4(f)(6)(iii). 18 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). PO 00000 14 15 15 17 Frm 00135 Fmt 4703 Sfmt 4703 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–2020–066 on the subject line. Paper Comments • Send paper comments in triplicate to: Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–CBOE–2020–066. 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–2020–066 and should be submitted on or before August 10, 2020. E:\FR\FM\20JYN1.SGM 20JYN1 Federal Register / Vol. 85, No. 139 / Monday, July 20, 2020 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–15550 Filed 7–17–20; 8:45 am] BILLING CODE 8011–01–P DEPARTMENT OF TRANSPORTATION Federal Highway Administration Notice of Final Federal Agency Actions on Proposed Highway in California Federal Highway Administration (FHWA), Department of Transportation (DOT). ACTION: Notice of limitation on claims for Judicial Review of actions by the California Department of Transportation (Caltrans). AGENCY: The FHWA, on behalf of Caltrans, is issuing this notice to announce actions taken by Caltrans, that are final. The actions relate to the proposed Newell Road Bridge Replacement Project (Federal-aid project number BRLS–5100(017)) in the City of Palo Alto, County of Santa Clara, State of California. Those actions grant licenses, permits, and approvals for the project. DATES: By this notice, the FHWA, on behalf of Caltrans, is advising the public of final agency actions subject to 23 U.S.C. 139(l)(1). A claim seeking judicial review of the Federal agency actions on the bridge replacement project will be barred unless the claim is filed on or before December 17, 2020. If the Federal law that authorizes judicial review of a claim provides a time period of less than 150 days for filing such claim, then that shorter time period applies. FOR FURTHER INFORMATION CONTACT: For Caltrans: Tom Holstein, Senior Environmental Planner, Caltrans District 4 Office of Local Assistance, 12th Floor, 111 Grand Avenue, Oakland, CA 94623. Office Hours: 8:00 a.m.–5:00 p.m., Pacific Standard Time, telephone (510) 286–6371 or email tom.holstein@ dot.ca.gov. For FHWA, contact David Tedrick at (916) 498–5024 or email david.tedrick@dot.gov. SUPPLEMENTARY INFORMATION: Effective July 1, 2007, FHWA assigned, and Caltrans assumed, environmental responsibilities for this project pursuant to 23 U.S.C. 327. Notice is hereby given that the Caltrans has taken final agency actions subject to 23 U.S.C. 139(l)(1) by issuing licenses, permits, and approvals SUMMARY: 19 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 18:30 Jul 17, 2020 Jkt 250001 for the following bridge replacement project in the State of California. The City of Palo Alto proposes to replace the existing Newell Road Bridge (37C–0223) between Edgewood Drive in the City of Palo Alto and Woodland Avenue in the City of East Palo Alto with a new two-lane bridge on the existing alignment of Newell Road. Across San Francisquito Creek at Newell Road, the Project would: Maintain connections for vehicular, bicycle, and pedestrian transportation; improve pedestrian and bicycle access; improve safety for all modes of transportation; accommodate increased flows related to San Francisquito Creek improvements to address anticipated flooding risks; and upgrade the channel width beneath the bridge to allow for the 70-year storm event (7,500 cubic feet per second) to pass. The actions by the Federal agencies, and the laws under which such actions were taken, are described in the Final Environmental Impact Report/Environmental Assessment with Finding of No Significant Impact for the project, issued May 21, 2020, and in other documents in Caltrans’ project records. The FEA, FONSI, and other project records are available by contacting Caltrans at the addresses provided above. The FEIR/ EA, FONSI, and other project records can be viewed and downloaded from the project website at https:// www.cityofpaloalto.org/gov/city_ information/projects/newell_road_ bridge_replacement_project.asp. This notice applies to all Federal agency decisions as of the issuance date of this notice and all laws under which such actions were taken, including but not limited to: 1. Council on Environmental Quality Regulations 2. National Environmental Policy Act of 1969, as amended, 42 U.S.C. 4321 et seq. 3. Federal-Aid Highway Act of 1970, 23 U.S.C. 109 4. MAP–21, the Moving Ahead for Progress in the 21st Century Act, (Pub. L. 112–141) 5. Clean Air Act Amendments of 1990 (CAAA) 6. Clean Water Act of 1977 and 1987 7. Federal Water Pollution Control Act of 1972 (see Clean Water Act of 1977 and 1987) 8. Federal Land Policy and Management Act of 1976 (Paleontological Resources) 9. Noise Control Act of 1972 10. Safe Drinking Water Act of 1944, as amended 11. Endangered Species Act of 1973 12. Executive Order 11990, Protection of Wetlands PO 00000 Frm 00136 Fmt 4703 Sfmt 4703 43941 13. Executive Order 13112, Invasive Species 14. Executive Order 13186, Migratory Birds 15. Fish and Wildlife Coordination Act of 1934, as amended 16. Migratory Bird Treaty Act 17. Water Bank Act Wetlands Mitigation Banks, ISTEA 1991, Sections 1006– 1007 18. Wildflowers, Surface Transportation and Uniform Relocation Act of 1987 Section 130 19. Coastal Zone Management Act of 1972 20. Coastal Zone Management Act Reauthorization Amendments of 1990 21. Executive Order 11988, Floodplain Management 22. Department of Transportation (DOT) Executive Order 5650.2— Floodplain Management and Protection (April 23, 1979) 23. Rivers and Harbors Appropriation Act of 1899, Section 9 and 10 24. Title VI of the Civil Rights Act of 1964, as amended 25. Executive Order 12898, Federal Actions to Address Environmental Justice and Low-Income Populations (Catalog of Federal Domestic Assistance Program Number 20.205, Highway Planning and Construction. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities apply to this program.) Authority: 23 U.S.C. 139(l)(1). Issued on: July 13, 2020. Rodney Whitfield, Director, Financial Services, Federal Highway Administration, California Division. [FR Doc. 2020–15639 Filed 7–17–20; 8:45 am] BILLING CODE 4910–RY–P DEPARTMENT OF THE TREASURY Internal Revenue Service Proposed Collection; Comment Request for Form 15597 Internal Revenue Service (IRS), Treasury. ACTION: Notice and request for comments. AGENCY: The Internal Revenue Service, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. SUMMARY: E:\FR\FM\20JYN1.SGM 20JYN1

Agencies

[Federal Register Volume 85, Number 139 (Monday, July 20, 2020)]
[Notices]
[Pages 43938-43941]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-15550]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89307; File No. SR-CBOE-2020-066]


Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Rule 5.24

July 14, 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 July 2, 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 amend Rule 5.24. The text of the proposed rule change is provided 
below.

(additions are italicized; deletions are [bracketed])

* * * * *

Rules of Cboe Exchange, Inc.

* * * * *

Rule 5.24. Disaster Recovery

    (a)-(d) No change.
    (e) Loss of Trading Floor. If the Exchange trading floor becomes 
inoperable, the Exchange will continue to operate in a screen-based 
only environment using a floorless configuration of the System that 
is operational while the trading floor facility is inoperable. The 
Exchange will operate using this configuration only until the 
Exchange's trading floor facility is operational. Open outcry 
trading will not be available in the event the trading floor becomes 
inoperable, except in accordance with paragraph (2) below and 
pursuant to Rule 5.26, as applicable.
    (1) Applicable Rules. In the event that the trading floor 
becomes inoperable, trading will be conducted pursuant to all 
applicable System Rules, except that open outcry Rules will not be 
in force, including but not limited to the Rules (or applicable 
portions of the Rules) in Chapter 5, Section G, and as follows 
(subparagraphs (A) through (E) will be effective until [June 
30]August 31, 2020):
* * * * *
    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 amend Rule 5.24 regarding the Exchange's 
business continuity and disaster recovery plans. Rule 5.24 describes 
which Trading Permit Holders (``TPHs'') are required to connect to the 
Exchange's backup systems as well as certain actions the Exchange may 
take as part of its business continuity plans so that it may maintain 
fair and orderly markets if unusual circumstances occurred that could 
impact the Exchange's ability to conduct business. This includes what 
actions the Exchange would take if its trading floor became inoperable. 
Specifically, Rule 5.24(e) states if the Exchange trading floor becomes 
inoperable, the Exchange will continue to operate in a screen-based 
only environment using a floorless configuration of the System that is 
operational while the trading floor facility is inoperable. The 
Exchange would operate using that

[[Page 43939]]

configuration only until the Exchange's trading floor facility became 
operational. Open outcry trading would not be available in the event 
the trading floor becomes inoperable.\5\
---------------------------------------------------------------------------

    \5\ Pursuant to Rule 5.26, the Exchange may enter into a back-up 
trading arrangement with another exchange, which could allow the 
Exchange to use the facilities of a back-up exchange to conduct 
trading of certain of its products. The Exchange currently has no 
back-up trading arrangement in place with another exchange.
---------------------------------------------------------------------------

    Rule 5.24(e)(1) currently states in the event that the trading 
floor becomes inoperable, trading will be conducted pursuant to all 
applicable System Rules, except that open outcry Rules would not be in 
force, including but not limited to the Rules (or applicable portions) 
in Chapter 5, Section G,\6\ and that all non-trading rules of the 
Exchange would continue to apply. The Exchange recently adopted several 
rule changes that would apply during a time in which the trading floor 
in inoperable, which are effective until June 30, 2020.\7\ The Exchange 
believes these rules were necessary to implement to maintain a fair and 
orderly market while the trading floor was not operable in order to 
create an all-electronic trading environment similar to the otherwise 
unavailable open outcry trading environment.
---------------------------------------------------------------------------

    \6\ Chapter 5, Section G of the Exchange's rulebook sets forth 
the rules and procedures for manual order handling and open outcry 
trading on the Exchange.
    \7\ See Securities Exchange Act Release Nos. 88386 (March 13, 
2020), 85 FR 15823 (March 19, 2020) (SR-CBOE-2020-019); 88447 (March 
20, 2020), 85 FR 17129 (March 26, 2020) (SR-CBOE-2020-023); 88490 
(March 26, 2020), 85 FR 18318 (April 1, 2020) (SR-CBOE-2020-026); 
88530 (March 31, 2020), 85 FR 19182 (April 6, 2020) (SR-CBOE-2020-
031); and 88886 (May 15, 2020), 85 FR 31008 (May 21, 2020) (SR-CBOE-
2020-047).
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    As of March 16, 2020, the Exchange suspended open outcry trading to 
help prevent the spread of COVID-19.\8\ The trading floor remained 
closed until June 15, 2020. During the time when the trading floor was 
closed, the Exchange operated in an all-electronic trading environment 
and the temporary rules in Rule 5.24(e)(1) applied to that electronic 
trading environment. The Exchange believes that, while those temporary 
rules did not fully replicate open outcry trading, they allowed all-
electronic trading to occur more similarly to open outcry trading.\9\
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    \8\ On March 11, 2020, the World Health Organization 
characterized COVID-19 as a pandemic and to slow the spread of the 
disease, federal and state officials implemented social-distancing 
measures, placed significant limitations on large gatherings, 
limited travel, and closed non-essential businesses.
    \9\ The Exchange continues to consider other enhancements to the 
all-electronic trading configuration that it believes may permit 
this configuration to further replicate the open outcry trading 
environment. The Exchange would submit separate rule filings for any 
such proposed enhancements. The Exchange notes it recently submitted 
a separate rule filing to adopt a virtual trading floor, which the 
Exchange may determine to make available if the trading floor 
becomes inoperable (or is operating in a modified state). See 
Securities Exchange Act Release No. 89131 (June 23, 2020), 85 FR 
38951 (June 29, 2020) (SR-CBOE-2020-055). If the Commission approves 
that filing, and the trading floor subsequently becomes inoperable 
and the Exchange makes the virtual trading floor available, the 
temporary rules in Rule 5.24(e)(1) would not be in effect (the 
Exchange intends to submit a partial amendment to SR-CBOE-2020-055 
to make that clear). Separately, the Exchange believes the temporary 
rules in Rule 5.24(e)(1) should be effective for a period of time 
while the virtual trading floor is available, the Exchange will 
submit a separately rule filing to propose that change.
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    The trading floor is currently open for open outcry trading, and 
the Exchange is operating pursuant to its normal hybrid trading rules. 
The Exchange implemented numerous health and safety measures in 
connection with the reopening of the trading floor on June 15, 2020 to 
help protect the safety and welfare of the trading floor community and 
help prevent the continued spread of COVID-19.\10\ However, the 
Exchange recognizes the ongoing nature of the COVID-19 pandemic in the 
United States, which may cause the Exchange to once again close its 
trading floor to help prevent the continued spread of COVID-19.
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    \10\ See Exchange Notice C2020052601, Standards of Conduct 
related to the Reopening of the Cboe Options Trading Floor and 
COVID-19 (May 26, 2020), available at https://cdn.cboe.com/resources/release_notes/2020/Standards-of-Conduct-related-to-the-Reopening-of-the-Cboe-Options-Trading-Floor-Notice-Final.pdf.
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    In the event the Exchange did close its trading floor again, the 
Exchange believes it would be necessary to again apply the recently 
adopted temporary rules in Rule 5.24(e)(1) to maintain a fair and 
orderly market while the trading floor was not operable in order to 
create an all-electronic trading environment similar to the otherwise 
unavailable open outcry trading environment. As noted above, Rule 
5.24(e)(1) is effective only until June 30, 2020 (and the rules became 
inapplicable upon the reopening of the trading floor on June 15, 2020). 
Given the Exchange may believe it is appropriate to close the trading 
floor with little advanced notice and in a short timeframe to help 
protect the safety and welfare of the trading floor community, the 
Exchange proposes to extend the effectiveness of the temporary rules in 
Rule 5.24(e)(1) to August 31, 2020 (unless further extended). The 
Exchange believes this will permit the Exchange to as seamlessly as 
possible transition back to an all-electronic trading environment. The 
Exchange notes Rule 5.24(e)(1) will not apply to trading during times 
when the trading floor remains operable.
    Previously when the temporary provisions of Rule 5.24(e)(1) were in 
place, the Exchange's Regulatory Division has continued its standard 
routine surveillance reviews for electronic trading and implemented a 
regulatory plan to surveil the rules in place in Rule 5.24(e)(1) when 
operating in a screen-based only environment. In the event the Exchange 
closes its trading floor again and the temporary provisions in Rule 
5.24(e)(1) become applicable in an all-electronic trading environment, 
the Exchange's Regulatory Division would reimplement that regulatory 
plan to surveil those rules.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\11\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \12\ 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) \13\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
    \13\ Id.
---------------------------------------------------------------------------

    In particular, the Exchange believes the proposed rule change will 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system, and, in general, protect investors 
and the public interest by permitting the Exchange to as seamlessly as 
possible transition back to an all-electronic trading environment in 
the event the Exchange determines it is appropriate to again close its 
trading floor. The Exchange expects it would take this action if it 
believes necessary and appropriate to help protect the safety and 
welfare of the trading community. Such a determination may

[[Page 43940]]

occur with little advance notice, and closure of the trading floor may 
need to occur in a short time frame. The Exchange continues to believe 
the recent amendments to Rule 5.24(e)(1) allowed all-electronic trading 
to occur more similarly to open outcry trading while the trading floor 
was closed. The Exchange believes the proposed rule change is necessary 
and appropriate to provide TPHs with execution opportunities in an all-
electronic trading environment for orders that generally execute in 
open outcry trading. Additionally, the proposed rule change will 
provide TPHs with an all-electronic trading environment to which they 
became accustomed when the trading floor was previously closed, and 
therefore will provide investors with consistent rules that apply when 
the Exchange operates in an all-electronic environment. The proposed 
rule change will provide investors with definitive knowledge of what 
rules will apply when the trading floor is closed.

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 is 
not intended as a competitive filing, but rather extends the 
effectiveness of temporary rules as part of the Exchange's business 
continuity plans, which are intended to allow the Exchange to continue 
to maintain fair and orderly markets while the Exchange's trading floor 
continues to be inoperable.

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 \14\ and Rule 19b-
4(f)(6) thereunder.\15\
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 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 Commission has waived the five business day notification 
requirement for this proposed rule change.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \16\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \17\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has asked the Commission to waive the 30-day operative delay so that 
the proposed rule change may become operative immediately. The Exchange 
believes extension of the temporary rules put in place due to the 
ongoing COVID-19 pandemic will permit the Exchange to minimize 
disruptions in the market during a transition back to an all-electronic 
trading environment if the Exchange believes it is necessary and 
appropriate to help protect the safety and welfare of the trading 
community. The Commission believes that waiving the 30-day operative 
delay is consistent with the protection of investors and the public 
interest as it will allow the temporary rules to continue with minimal 
interruption, thereby avoiding investor confusion that could result 
from an interruption in the effectiveness of the rules. Accordingly, 
the Commission hereby waives the operative delay and designates the 
proposed rule change operative upon filing.\18\
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    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ For purposes only of waiving the 30-day operative delay, 
the Commission also has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-CBOE-2020-066 on the subject line.

Paper Comments

     Send paper comments in triplicate to: Secretary, 
Securities and Exchange Commission, 100 F Street NE, Washington, DC 
20549-1090.

All submissions should refer to File Number SR-CBOE-2020-066. 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-2020-066 and should be submitted on 
or before August 10, 2020.


[[Page 43941]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-15550 Filed 7-17-20; 8:45 am]
BILLING CODE 8011-01-P
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