Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Amend Rule 10.3 by Extending the Credit Option Margin Pilot Program Through September 1, 2021, 46200-46202 [2020-16571]
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Federal Register / Vol. 85, No. 148 / Friday, July 31, 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–
NASDAQ–2020–038 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–NASDAQ–2020–038. 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
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NASDAQ–2020–038 and should be
submitted on or before August 21, 2020.
18:33 Jul 30, 2020
[FR Doc. 2020–16572 Filed 7–30–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
VerDate Sep<11>2014
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
J. Matthew DeLesDernier,
Assistant Secretary.
Jkt 250001
[Release No. 34–89401; File No. SR–CBOE–
2020–068]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating To Amend Rule
10.3 by Extending the Credit Option
Margin Pilot Program Through
September 1, 2021
July 27, 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 17,
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 10.3 by extending the Credit
Option Margin Pilot Program through
September 1, 2021. The text of the
proposed rule change is provided in
Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://www.cboe.com/
AboutCBOE/
CBOELegalRegulatoryHome.aspx), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
PO 00000
9 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 00134
Fmt 4703
Sfmt 4703
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
On February 2, 2011, the Commission
approved the Exchange’s proposal to
establish a Credit Option Margin Pilot
Program (‘‘Program’’).5 The proposal
became effective on a pilot basis to run
on a parallel track with Financial
Industry Regulatory Authority
(‘‘FINRA’’) Rule 4240 that similarly
operates on an interim pilot basis.6
On January 17, 2012, the Exchange
filed a rule change to, among other
things, decouple the Program with the
FINRA program and to extend the
expiration date of the Program to
January 17, 2013.7 The Program,
however, continues to be substantially
similar to the provisions of the FINRA
program. Subsequently, the Exchange
filed rule changes to extend the program
until January 17, 2014, January 16, 2015,
January 15, 2016, January 17, 2017, July
18, 2017, July 18, 2018, July 18, 2019
and July 20, 2020, respectively.8 The
5 See Securities Exchange Act Release No. 63819
(February 2, 2011), 76 FR 6838 (February 8, 2011)
order approving (SR–CBOE–2010–106). To
implement the Program, the Exchange amended
Rule 10.3(l), Margin Requirements, to make Cboe
Option’s margin requirements for Credit Options
consistent with Financial Industry Regulatory
Authority (‘‘FINRA’’) Rule 4240, Margin
Requirements for Credit Default Swaps. Cboe
Options Credit Options (i.e., Credit Default Options
and Credit Default Basket Options) are analogous to
credit default swaps.
6 See Securities Exchange Act Release No. 59955
(May 22, 2009), 74 FR 25586 (May 28, 2009) (Notice
of Filing and Order Granting Accelerated Approval
of Proposed Rule Change; SR–FINRA–2009–012).
7 See Securities Exchange Act Release No. 66163
(January 17, 2012), 77 FR 3318 (January 23, 2012)
(SR–CBOE–2012–007).
8 See Securities Exchange Act Release Nos. 68539
(December 27, 2012), 78 FR 138 (January 2, 2013)
(SR–CBOE–2012–125), 71124 (December 18, 2013),
78 FR 77754 (December 24, 2013) (SR–CBOE–2013–
123), 73837 (December 15, 2014), 79 FR 75850
(December 19, 2014) (SR–CBOE–2014–091), 76824
(January 5, 2016), 81 FR 1255 (January 11, 2016)
(SR–CBOE–2015–118), 79621 (December 14, 2016)
E:\FR\FM\31JYN1.SGM
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Federal Register / Vol. 85, No. 148 / Friday, July 31, 2020 / Notices
Exchange believes that extending the
expiration date of the Program further
will allow for further analysis of the
Program and a determination of how the
Program should be structured in the
future. Thus, the Exchange is now
currently proposing to extend the
duration of the Program for an
additional period until September 1,
2021.9
Additionally, the Exchange believes
that it is in the public interest to extend
the expiration date of the Program
because it will continue to allow the
Exchange to list Credit Options for
trading. As a result, the Exchange will
remain competitive with the Over-theCounter Market with respect to swaps
and security-based swaps. In the future,
if the Exchange proposes an additional
extension of the Credit Option Margin
Pilot Program or proposes to make the
Program permanent, then the Exchange
will submit a filing proposing such
amendments to the Program.
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 facilitation 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
81 FR 95236 (December 27, 2016) (SR–CBOE–2016–
089), 81083 (July 6, 2017) 82 FR 32219 (July 12,
2017) (SR–CBOE–2017–051), 83672 (July 19, 2018)
83 FR 35305 (July 25, 2018) (SR–CBOE–2018–052),
and 86411 (July 18, 2019) 84 FR 35702 (July 24,
2019) (SR–CBOE–2019–037).
9 The Exchange is filing the proposed rule change
for immediate effectiveness. The Exchange is
proposing that the implementation date of the
proposed rule change will be July 20, 2020. The
proposed rule change will expire on September 1,
2021, which is the same date FINRA’s
corresponding program expires. See Securities
Exchange Act Release Nos. 89036 (June 10, 2020),
85 FR 36458 (June 16, 2020) (SR–FINRA–2020–
016).
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(5).
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18:33 Jul 30, 2020
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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.
In particular, the Exchange believes
that the proposed rule change will
further the purposes of the Act because,
consistent with the goals of the
Commission at the initial adoption of
the program, the margin requirements
set forth by the proposed rule change
will help to stabilize the financial
markets. In addition, the proposed rule
change is substantially similar to
existing FINRA Rule 4240.
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. Specifically,
the Exchange believes that, by extending
the expiration of the Program, the
proposed rule change will allow for
further analysis of the Program and a
determination of how the Program shall
be structured in the future. In doing so,
the proposed rule change will also serve
to promote regulatory clarity and
consistency, thereby reducing burdens
on the marketplace and facilitating
investor protection.
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:
A. Significantly affect the protection
of investors or the public interest;
B. impose any significant burden on
competition; and
C. 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 13 and Rule 19b–4(f)(6) 14
thereunder.
12 Id.
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, as required
under Rule 19b–4(f)(6)(iii), the Exchange provided
the Commission with written notice of its intent to
file the proposed rule change, along with a brief
description and the text of the proposed rule
change, at least five business days prior to the date
of the filing of the proposed rule change, or such
shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
PO 00000
13 15
14 17
Frm 00135
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46201
The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Exchange states that waiver
of the 30-day operative delay will allow
it to maintain the status quo, thereby
reducing market disruption. 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
Program to continue uninterrupted,
thereby avoiding investor confusion that
could result from a temporary
interruption of the Program. For this
reason, the Commission designates the
proposed rule change to be operative
upon filing.15
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission will institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CBOE–2020–068 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–2020–068. 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
15 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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Federal Register / Vol. 85, No. 148 / Friday, July 31, 2020 / Notices
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;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly.
All submissions should refer to File
Number SR–CBOE–2020–068 and
should be submitted on or before
August 21, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–16571 Filed 7–30–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–89399; File No. SR–CBOE–
2020–051]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Designation
of a Longer Period for Commission
Action on a Proposed Rule Change, as
Modified by Amendment No. 1, To
Amend Its Automated Price
Improvement Auction Rules in
Connection With Agency Order Size
Requirements
July 27, 2020.
On June 11, 2020, Cboe Exchange, Inc.
(‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
amend Rules 5.37 and 5.38 to allow the
16 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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18:33 Jul 30, 2020
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Exchange to determine maximum size
requirements for agency orders in SPX
submitted though the Automated
Improvement Mechanism (‘‘AIM’’) and
Complex Automated Improvement
Mechanism (‘‘C–AIM’’) auctions. The
proposed rule change was published for
comment in the Federal Register on
June 18, 2020.3 On July 23, 2020, the
Exchange submitted Amendment No. 1
to the proposed rule change, which
replaced and superseded the proposed
rule change in its entirety.4
Section 19(b)(2) of the Act 5 provides
that within 45 days of the publication of
notice of the filing of a proposed rule
change, or within such longer period up
to 90 days as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding, or as to which the
self-regulatory organization consents,
the Commission shall either approve the
proposed rule change, disapprove the
proposed rule change, or institute
proceedings to determine whether the
proposed rule change should be
disapproved. The 45th day after
publication of the notice for this
proposed rule change is August 2, 2020.
The Commission is extending this 45day time period.
The Commission finds it appropriate
to designate a longer period within
which to take action on the proposed
rule change so that it has sufficient time
to consider the proposed rule change, as
modified by Amendment No. 1, and the
comments received. Accordingly, the
Commission, pursuant to Section
19(b)(2) of the Act,6 designates
September 16, 2020 as the date by
which the Commission shall either
approve or disapprove, or institute
proceedings to determine whether to
disapprove, the proposed rule change,
as modified by Amendment No. 1 (File
No. SR–CBOE–2020–051).
3 See Securities Exchange Act Release No. 89058
(June 12, 2020), 85 FR 36918. Comments on the
proposed rule change can be found at: https://
www.sec.gov/comments/sr-cboe-2020-051/
srcboe2020051.htm.
4 In Amendment No. 1, the Exchange: (1)
Amended its proposal to modify the proposed
maximum size requirement for AIM and C–AIM
agency orders in SPX from 100 contracts to 10
contracts, specify that this size requirement would
apply to all agency orders in SPX, and make related
conforming changes to its proposed rule text; and
(2) provided additional data, justification, and
support for its modified proposal. The full text of
Amendment No. 1 is available on the Commission’s
website at: https://www.sec.gov/comments/sr-cboe2020-051/srcboe2020051-7470738-221292.pdf.
5 15 U.S.C. 78s(b)(2).
6 Id.
PO 00000
Frm 00136
Fmt 4703
Sfmt 4703
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–16570 Filed 7–30–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–89400; File No. SR–CBOE–
2020–052]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Designation
of a Longer Period for Commission
Action on a Proposed Rule Change, as
Modified by Amendment No. 1, To
Amend Rules 5.37, 5.38, and 5.73
July 27, 2020.
On June 3, 2020, Cboe Exchange, Inc.
(‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
amend Rules 5.37, 5.38, and 5.73 to (1)
allow the Exchange to determine to
disseminate the stop price in auction
notification messages for Automated
Improvement Mechanism (‘‘AIM’’),
Complex Automated Improvement
Mechanism (‘‘C–AIM’’), and FLEX AIM
auctions in SPX; and (2) modify the
minimum increment for C–AIM and
FLEX AIM auction responses in
connection with index combo orders in
SPX. The proposed rule change was
published for comment in the Federal
Register on June 18, 2020.3 On July 22,
2020, the Exchange submitted
Amendment No. 1 to the proposed rule
change, which replaced and superseded
the proposed rule change in its
entirety.4
7 17
CFR 200.30–3(a)(31).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 89063
(June 12, 2020), 85 FR 36923. Comments on the
proposed rule change can be found at: https://
www.sec.gov/comments/sr-cboe-2020-052/
srcboe2020052.htm.
4 In Amendment No. 1, the Exchange: (1)
Amended the proposal to add that, when the
proposed stop price dissemination in auction
notification messages is enabled for AIM, C–AIM,
or FLEX AIM auctions in SPX, it would apply to
all such AIM, C–AIM, or FLEX AIM auctions; (2)
amended the proposal to specify that the proposed
minimum increment modification applies to index
combo orders in SPX, and to correct an internal
cross-reference within the proposed rules; (3)
provided additional detail to the description and
examples of the proposed modification to the
minimum increment for index combo orders in
SPX; and (4) provided additional justification and
support for the proposed rule change. The full text
of Amendment No. 1 is available on the
1 15
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]]>Agencies
[Federal Register Volume 85, Number 148 (Friday, July 31, 2020)]
[Notices]
[Pages 46200-46202]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16571]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-89401; File No. SR-CBOE-2020-068]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Relating
To Amend Rule 10.3 by Extending the Credit Option Margin Pilot Program
Through September 1, 2021
July 27, 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 17, 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.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
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 10.3 by extending the Credit Option Margin Pilot Program
through September 1, 2021. The text of the proposed rule change is
provided in Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's website (https://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
On February 2, 2011, the Commission approved the Exchange's
proposal to establish a Credit Option Margin Pilot Program
(``Program'').\5\ The proposal became effective on a pilot basis to run
on a parallel track with Financial Industry Regulatory Authority
(``FINRA'') Rule 4240 that similarly operates on an interim pilot
basis.\6\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 63819 (February 2,
2011), 76 FR 6838 (February 8, 2011) order approving (SR-CBOE-2010-
106). To implement the Program, the Exchange amended Rule 10.3(l),
Margin Requirements, to make Cboe Option's margin requirements for
Credit Options consistent with Financial Industry Regulatory
Authority (``FINRA'') Rule 4240, Margin Requirements for Credit
Default Swaps. Cboe Options Credit Options (i.e., Credit Default
Options and Credit Default Basket Options) are analogous to credit
default swaps.
\6\ See Securities Exchange Act Release No. 59955 (May 22,
2009), 74 FR 25586 (May 28, 2009) (Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule Change; SR-FINRA-
2009-012).
---------------------------------------------------------------------------
On January 17, 2012, the Exchange filed a rule change to, among
other things, decouple the Program with the FINRA program and to extend
the expiration date of the Program to January 17, 2013.\7\ The Program,
however, continues to be substantially similar to the provisions of the
FINRA program. Subsequently, the Exchange filed rule changes to extend
the program until January 17, 2014, January 16, 2015, January 15, 2016,
January 17, 2017, July 18, 2017, July 18, 2018, July 18, 2019 and July
20, 2020, respectively.\8\ The
[[Page 46201]]
Exchange believes that extending the expiration date of the Program
further will allow for further analysis of the Program and a
determination of how the Program should be structured in the future.
Thus, the Exchange is now currently proposing to extend the duration of
the Program for an additional period until September 1, 2021.\9\
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 66163 (January 17,
2012), 77 FR 3318 (January 23, 2012) (SR-CBOE-2012-007).
\8\ See Securities Exchange Act Release Nos. 68539 (December 27,
2012), 78 FR 138 (January 2, 2013) (SR-CBOE-2012-125), 71124
(December 18, 2013), 78 FR 77754 (December 24, 2013) (SR-CBOE-2013-
123), 73837 (December 15, 2014), 79 FR 75850 (December 19, 2014)
(SR-CBOE-2014-091), 76824 (January 5, 2016), 81 FR 1255 (January 11,
2016) (SR-CBOE-2015-118), 79621 (December 14, 2016) 81 FR 95236
(December 27, 2016) (SR-CBOE-2016-089), 81083 (July 6, 2017) 82 FR
32219 (July 12, 2017) (SR-CBOE-2017-051), 83672 (July 19, 2018) 83
FR 35305 (July 25, 2018) (SR-CBOE-2018-052), and 86411 (July 18,
2019) 84 FR 35702 (July 24, 2019) (SR-CBOE-2019-037).
\9\ The Exchange is filing the proposed rule change for
immediate effectiveness. The Exchange is proposing that the
implementation date of the proposed rule change will be July 20,
2020. The proposed rule change will expire on September 1, 2021,
which is the same date FINRA's corresponding program expires. See
Securities Exchange Act Release Nos. 89036 (June 10, 2020), 85 FR
36458 (June 16, 2020) (SR-FINRA-2020-016).
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Additionally, the Exchange believes that it is in the public
interest to extend the expiration date of the Program because it will
continue to allow the Exchange to list Credit Options for trading. As a
result, the Exchange will remain competitive with the Over-the-Counter
Market with respect to swaps and security-based swaps. In the future,
if the Exchange proposes an additional extension of the Credit Option
Margin Pilot Program or proposes to make the Program permanent, then
the Exchange will submit a filing proposing such amendments to the
Program.
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 facilitation
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.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
\12\ Id.
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In particular, the Exchange believes that the proposed rule change
will further the purposes of the Act because, consistent with the goals
of the Commission at the initial adoption of the program, the margin
requirements set forth by the proposed rule change will help to
stabilize the financial markets. In addition, the proposed rule change
is substantially similar to existing FINRA Rule 4240.
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. Specifically, the Exchange
believes that, by extending the expiration of the Program, the proposed
rule change will allow for further analysis of the Program and a
determination of how the Program shall be structured in the future. In
doing so, the proposed rule change will also serve to promote
regulatory clarity and consistency, thereby reducing burdens on the
marketplace and facilitating investor protection.
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:
A. Significantly affect the protection of investors or the public
interest;
B. impose any significant burden on competition; and
C. 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 \13\ and
Rule 19b-4(f)(6) \14\ thereunder.
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6). In addition, as required under Rule
19b-4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the text of the proposed rule change, at least
five business days prior to the date of the filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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The Exchange has asked the Commission to waive the 30-day operative
delay so that the proposal may become operative immediately upon
filing. The Exchange states that waiver of the 30-day operative delay
will allow it to maintain the status quo, thereby reducing market
disruption. 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 Program to continue uninterrupted,
thereby avoiding investor confusion that could result from a temporary
interruption of the Program. For this reason, the Commission designates
the proposed rule change to be operative upon filing.\15\
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\15\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-CBOE-2020-068 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-2020-068. 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
[[Page 46202]]
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; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly.
All submissions should refer to File Number SR-CBOE-2020-068 and
should be submitted on or before August 21, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-16571 Filed 7-30-20; 8:45 am]
BILLING CODE 8011-01-P
