Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 20.10 Concerning Off-Floor Transfers, 49690-49692 [2020-17758]
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Federal Register / Vol. 85, No. 158 / Friday, August 14, 2020 / Notices
security numbers, home addresses, or
personal phone numbers in their filings,
unless an NRC regulation or other law
requires submission of such
information. For example, in some
instances, individuals provide home
addresses in order to demonstrate
proximity to a facility or site. With
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constitute a Fair Use application,
participants are requested not to include
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For further details with respect to this
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amendment dated July 31, 2020.
Attorney for licensee: Millicent
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Counsel, Southern Nuclear Operating
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AL 35201–1295. NRC Branch Chief:
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Dated: August 10, 2020.
For the Nuclear Regulatory Commission.
Michael T. Markley,
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of Operating Reactor Licensing, Office of
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[FR Doc. 2020–17770 Filed 8–13–20; 8:45 am]
BILLING CODE 7590–01–P
POSTAL REGULATORY COMMISSION
[Docket Nos. MC2020–215 and CP2020–243]
New Postal Products
Postal Regulatory Commission.
Notice.
AGENCY:
ACTION:
The Commission is noticing a
recent Postal Service filing for the
Commission’s consideration concerning
a negotiated service agreement. This
notice informs the public of the filing,
invites public comment, and takes other
administrative steps.
DATES: Comments are due: August 18,
2020.
ADDRESSES: Submit comments
electronically via the Commission’s
Filing Online system at https://
www.prc.gov. Those who cannot submit
comments electronically should contact
the person identified in the FOR FURTHER
INFORMATION CONTACT section by
telephone for advice on filing
alternatives.
FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
SUPPLEMENTARY INFORMATION:
khammond on DSKJM1Z7X2PROD with NOTICES
SUMMARY:
Table of Contents
I. Introduction
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17:29 Aug 13, 2020
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II. Docketed Proceeding(s)
I. Introduction
The Commission gives notice that the
Postal Service filed request(s) for the
Commission to consider matters related
to negotiated service agreement(s). The
request(s) may propose the addition or
removal of a negotiated service
agreement from the market dominant or
the competitive product list, or the
modification of an existing product
currently appearing on the market
dominant or the competitive product
list.
Section II identifies the docket
number(s) associated with each Postal
Service request, the title of each Postal
Service request, the request’s acceptance
date, and the authority cited by the
Postal Service for each request. For each
request, the Commission appoints an
officer of the Commission to represent
the interests of the general public in the
proceeding, pursuant to 39 U.S.C. 505
(Public Representative). Section II also
establishes comment deadline(s)
pertaining to each request.
The public portions of the Postal
Service’s request(s) can be accessed via
the Commission’s website (https://
www.prc.gov). Non-public portions of
the Postal Service’s request(s), if any,
can be accessed through compliance
with the requirements of 39 CFR
3011.301.1
The Commission invites comments on
whether the Postal Service’s request(s)
in the captioned docket(s) are consistent
with the policies of title 39. For
request(s) that the Postal Service states
concern market dominant product(s),
applicable statutory and regulatory
requirements include 39 U.S.C. 3622, 39
U.S.C. 3642, 39 CFR part 3030, and 39
CFR part 3040, subpart B. For request(s)
that the Postal Service states concern
competitive product(s), applicable
statutory and regulatory requirements
include 39 U.S.C. 3632, 39 U.S.C. 3633,
39 U.S.C. 3642, 39 CFR part 3035, and
39 CFR part 3040, subpart B. Comment
deadline(s) for each request appear in
section II.
II. Docketed Proceeding(s)
1. Docket No(s).: MC2020–215 and
CP2020–243; Filing Title: USPS Request
to Add Priority Mail Contract 648 to
Competitive Product List and Notice of
Filing Materials Under Seal; Filing
Acceptance Date: August 10, 2020;
Filing Authority: 39 U.S.C. 3642, 39 CFR
3040.130 through 3040.135, and 39 CFR
3035.105; Public Representative:
1 See Docket No. RM2018–3, Order Adopting
Final Rules Relating to Non-Public Information,
June 27, 2018, Attachment A at 19–22 (Order No.
4679).
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Kenneth R. Moeller; Comments Due:
August 18, 2020.
This Notice will be published in the
Federal Register.
Erica A. Barker,
Secretary.
[FR Doc. 2020–17877 Filed 8–13–20; 8:45 am]
BILLING CODE 7710–FW–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–89518; File No. SR–
CboeBZX–2020–058]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Amend Rule
20.10 Concerning Off-Floor Transfers
August 10, 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 29,
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 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.
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 Rule 20.10. The text of the
proposed rule change is provided
below. (additions are italicized;
deletions are [bracketed])
*
*
*
*
*
Rules of Cboe BZX Exchange, Inc.
*
*
*
*
*
Rule 20.10. Off-Floor Transfers of
Positions
(a)–(c) No change.
(d) Prior Written Notice. A Member(s)
and its Clearing Member(s) (to the
extent that the Member is not selfclearing) must submit to the Exchange,
in a manner determined by the
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 17
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Federal Register / Vol. 85, No. 158 / Friday, August 14, 2020 / Notices
Exchange, written notice prior to
effecting an off-floor transfer from or to
the account(s) of a Member(s), except
that notification is not required for
transfers [to correct errors]effected
pursuant to subparagraph (a)(1) or (a)(2)
of this Rule.
*
*
*
*
*
(g) Routine, Recurring Transfers. The
off-floor transfer procedure set forth in
this Rule is intended to facilitate nonroutine, non-recurring movements of
positions[. The off-floor transfer
procedure] and is not to be used
repeatedly or routinely[ in
circumvention of the normal auction
market process], except for transfers
between accounts of the same person
pursuant to subparagraph (a)(2). The
off-floor transfer procedure may not be
used in circumvention of the normal
auction process.
*
*
*
*
*
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.
khammond on DSKJM1Z7X2PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Rule 20.10 describes exceptions to the
prohibition against off-floor transactions
set forth in Rule 20.9, subject to certain
conditions. The exception in Rule
20.10(a)(2) provides that off-floor
transfers of positions are permissible if
from one account to another account
where no change in ownership is
involved (i.e., accounts of the same
person),5 provided the accounts are not
in separate aggregation units or
5 Rule 1.5(p) defines ‘‘person’’ as a natural person,
partnership, corporation, limited liability company,
entity, government, or political subdivision, agency
or instrumentality of a government.
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17:29 Aug 13, 2020
Jkt 250001
otherwise subject to information barrier
or account segregation requirements.
These transfers are subject to, among
other things, the requirement to submit
prior written notice of the transfers to
the Exchange pursuant to paragraph (d)
and the restriction on effecting these
transfers repeatedly or routinely.
The proposed rule change excepts offfloor position transfers effected
pursuant to Rule 20.10(a)(2) from the
prior written notice requirement in
paragraph (d) and from repeated,
recurring use restriction in paragraph
(g). Off-floor position transfers pursuant
to Rule 20.10(a)(2) do not involve a
change in ownership. In other words,
such transfers may only occur between
the same individual or legal entity.
These types of transfers are merely
transfers of positions from one account
to another, both of which accounts are
attributable to the same individual or
legal entity, and thus the transferred
option positions will continue to be
attributable to the same person. A
market participant effecting an off-floor
position transfer pursuant to Rule
20.10(a)(2) is analogous to an individual
transferring funds from a checking
account to a savings account, or from an
account at one bank to an account at
another bank—the money still belongs
to the same person, who is just holding
it in a different account for personal
financial reasons.
Because there is no change in
ownership of positions transferred
pursuant to Rule 20.10(a)(2), the
Exchange believes it is appropriate to
permit them to occur as routinely and
repeatedly as a market participant
would like. These transfers will
continue to be subject to the prohibition
on netting set forth in Rule 20.10(b), and
thus may not result in the closing of any
positions. While the off-floor position
transfers permitted by Rule 20.10 were
intended to accommodate non-routine
and non-recurring transfers, the
Exchange believes permitting routine,
recurring off-floor position transfers that
do not result in a change in ownership
or reduction in open interest is
consistent with the purpose of not being
used to circumvent the normal auction
purpose. Additionally, given that these
transfers may occur on a regular basis in
accordance with a market participants’
business needs and procedures, the
Exchange believes prior written notice
would be onerous and would not serve
any purpose given the lack of change in
ownership and in open interest. The
Exchange believes this will provide
market participants with additional
flexibility to structure their option
position accounts as they believe is
appropriate and move their positions
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49691
between accounts as they deem
necessary and appropriate for their
business and trading needs, including
for risk management purposes.
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.6 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 7 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) 8 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, to protect investors and the
public interest because it will provide
market participants with a more
efficient process to transfer open
positions between their own accounts in
accordance with their own business and
trading needs, including to respond to
then-current market conditions. Because
these transfers would not result in a
change in ownership or a reduction in
open interest, the Exchange believes the
proposed rule change remains
consistent with the purpose of Rule
20.10, which was to prohibit use of the
off-floor transfer procedure in
circumvention of the normal auction
process, as the normal auction process
involves the opening or closing of
positions through a transaction among
multiple market participants. Market
participants may maintain different
accounts for a variety of reasons, such
as the structure of their businesses, the
manner in which they trade, their risk
management procedures, and for capital
6 15
7 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
8 Id.
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49692
Federal Register / Vol. 85, No. 158 / Friday, August 14, 2020 / Notices
purposes. Given that these transfers may
occur on a regular basis in accordance
with a market participants’ business
needs and procedures, the Exchange
believes prior written notice would be
onerous and would not serve any
purpose given the lack of change in
ownership and in open interest.
Therefore, the proposed rule change
will benefit investors by permitting
market participants to manage the open
positions in their accounts in a manner
consistent with their businesses.
The Exchange recognizes the
numerous benefits of executing options
transactions on an exchange, including
price transparency, potential price
improvement, and a clearing guarantee.
However, the Exchange believes it is
appropriate to permit position transfers
among accounts of the same individual
or legal entity where there is no impact
on open interest to occur off the
exchange, as these benefits are
inapplicable to those transfers. These
transfers have a narrow scope and are
intended to permit market participants
to achieve their own business needs.
These transfers are not intended to be a
competitive trading tool. There is no
need for price discovery or
improvement, as the transfer merely
moves positions to different accounts
for the same person and does not open
or close any positions. These transfers
will result in no change in ownership.
The transactions that resulted in the
open positions to be transferred
pursuant to Rule 20.10(a)(2) were
already guaranteed by a clearing
member of The Options Clearing
Corporation (‘‘OCC’’), and the positions
may not be closed pursuant to the
transfer and will continue to be subject
to OCC rules, as they will continue to
be held in an account with an OCC
clearing member.
khammond on DSKJM1Z7X2PROD with NOTICES
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 to
address competitive issues. The
Exchange does not believe that the
proposed rule change will impose any
burden on intramarket competition that
is not necessary or appropriate in
furtherance of the purposes of the Act
because the proposed rule change will
apply to all market participants in the
same manner. All market participants
will be able to effect off-floor position
transfers pursuant to Rule 20.10(a)(2) on
a recurring or routine basis without
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17:29 Aug 13, 2020
Jkt 250001
providing the Exchange with notice of
such transfers. The Exchange does not
believe the proposed rule change will
impose any burden on intermarket
competition that is not necessary or
appropriate in furtherance of the
purposes of the Act because it relates
solely to the notice required for off-floor
transfers that may occur today, and the
frequency with which those transfers
may occur. These transfers will
continue to not result in a change in
ownership or netting, and thus will
have no impact on outstanding option
positions.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
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–
CboeBZX–2020–058 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.
IV. Solicitation of Comments
All submissions should refer to File
Number SR–CboeBZX–2020–058. 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;
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–
CboeBZX–2020–058 and should be
submitted on or before September 4,
2020.
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.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
J. Matthew DeLesDernier,
Assistant Secretary.
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 9 and Rule
19b–4(f)(6) thereunder.10 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 11 and Rule 19b–
4(f)(6) 12 thereunder.
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission will institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
9 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
11 15 U.S.C. 78s(b)(3)(A).
12 17 CFR 240.19b–4(f)(6).
10 17
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BILLING CODE 8011–01–P
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CFR 200.30–3(a)(12).
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]]>Agencies
[Federal Register Volume 85, Number 158 (Friday, August 14, 2020)]
[Notices]
[Pages 49690-49692]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17758]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-89518; File No. SR-CboeBZX-2020-058]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Rule 20.10 Concerning Off-Floor Transfers
August 10, 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 29, 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 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 BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') proposes to
amend Rule 20.10. The text of the proposed rule change is provided
below. (additions are italicized; deletions are [bracketed])
* * * * *
Rules of Cboe BZX Exchange, Inc.
* * * * *
Rule 20.10. Off-Floor Transfers of Positions
(a)-(c) No change.
(d) Prior Written Notice. A Member(s) and its Clearing Member(s)
(to the extent that the Member is not self-clearing) must submit to the
Exchange, in a manner determined by the
[[Page 49691]]
Exchange, written notice prior to effecting an off-floor transfer from
or to the account(s) of a Member(s), except that notification is not
required for transfers [to correct errors]effected pursuant to
subparagraph (a)(1) or (a)(2) of this Rule.
* * * * *
(g) Routine, Recurring Transfers. The off-floor transfer procedure
set forth in this Rule is intended to facilitate non-routine, non-
recurring movements of positions[. The off-floor transfer procedure]
and is not to be used repeatedly or routinely[ in circumvention of the
normal auction market process], except for transfers between accounts
of the same person pursuant to subparagraph (a)(2). The off-floor
transfer procedure may not be used in circumvention of the normal
auction process.
* * * * *
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
Rule 20.10 describes exceptions to the prohibition against off-
floor transactions set forth in Rule 20.9, subject to certain
conditions. The exception in Rule 20.10(a)(2) provides that off-floor
transfers of positions are permissible if from one account to another
account where no change in ownership is involved (i.e., accounts of the
same person),\5\ provided the accounts are not in separate aggregation
units or otherwise subject to information barrier or account
segregation requirements. These transfers are subject to, among other
things, the requirement to submit prior written notice of the transfers
to the Exchange pursuant to paragraph (d) and the restriction on
effecting these transfers repeatedly or routinely.
---------------------------------------------------------------------------
\5\ Rule 1.5(p) defines ``person'' as a natural person,
partnership, corporation, limited liability company, entity,
government, or political subdivision, agency or instrumentality of a
government.
---------------------------------------------------------------------------
The proposed rule change excepts off-floor position transfers
effected pursuant to Rule 20.10(a)(2) from the prior written notice
requirement in paragraph (d) and from repeated, recurring use
restriction in paragraph (g). Off-floor position transfers pursuant to
Rule 20.10(a)(2) do not involve a change in ownership. In other words,
such transfers may only occur between the same individual or legal
entity. These types of transfers are merely transfers of positions from
one account to another, both of which accounts are attributable to the
same individual or legal entity, and thus the transferred option
positions will continue to be attributable to the same person. A market
participant effecting an off-floor position transfer pursuant to Rule
20.10(a)(2) is analogous to an individual transferring funds from a
checking account to a savings account, or from an account at one bank
to an account at another bank--the money still belongs to the same
person, who is just holding it in a different account for personal
financial reasons.
Because there is no change in ownership of positions transferred
pursuant to Rule 20.10(a)(2), the Exchange believes it is appropriate
to permit them to occur as routinely and repeatedly as a market
participant would like. These transfers will continue to be subject to
the prohibition on netting set forth in Rule 20.10(b), and thus may not
result in the closing of any positions. While the off-floor position
transfers permitted by Rule 20.10 were intended to accommodate non-
routine and non-recurring transfers, the Exchange believes permitting
routine, recurring off-floor position transfers that do not result in a
change in ownership or reduction in open interest is consistent with
the purpose of not being used to circumvent the normal auction purpose.
Additionally, given that these transfers may occur on a regular basis
in accordance with a market participants' business needs and
procedures, the Exchange believes prior written notice would be onerous
and would not serve any purpose given the lack of change in ownership
and in open interest. The Exchange believes this will provide market
participants with additional flexibility to structure their option
position accounts as they believe is appropriate and move their
positions between accounts as they deem necessary and appropriate for
their business and trading needs, including for risk management
purposes.
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.\6\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \7\ 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) \8\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
\8\ Id.
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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, to protect
investors and the public interest because it will provide market
participants with a more efficient process to transfer open positions
between their own accounts in accordance with their own business and
trading needs, including to respond to then-current market conditions.
Because these transfers would not result in a change in ownership or a
reduction in open interest, the Exchange believes the proposed rule
change remains consistent with the purpose of Rule 20.10, which was to
prohibit use of the off-floor transfer procedure in circumvention of
the normal auction process, as the normal auction process involves the
opening or closing of positions through a transaction among multiple
market participants. Market participants may maintain different
accounts for a variety of reasons, such as the structure of their
businesses, the manner in which they trade, their risk management
procedures, and for capital
[[Page 49692]]
purposes. Given that these transfers may occur on a regular basis in
accordance with a market participants' business needs and procedures,
the Exchange believes prior written notice would be onerous and would
not serve any purpose given the lack of change in ownership and in open
interest. Therefore, the proposed rule change will benefit investors by
permitting market participants to manage the open positions in their
accounts in a manner consistent with their businesses.
The Exchange recognizes the numerous benefits of executing options
transactions on an exchange, including price transparency, potential
price improvement, and a clearing guarantee. However, the Exchange
believes it is appropriate to permit position transfers among accounts
of the same individual or legal entity where there is no impact on open
interest to occur off the exchange, as these benefits are inapplicable
to those transfers. These transfers have a narrow scope and are
intended to permit market participants to achieve their own business
needs. These transfers are not intended to be a competitive trading
tool. There is no need for price discovery or improvement, as the
transfer merely moves positions to different accounts for the same
person and does not open or close any positions. These transfers will
result in no change in ownership. The transactions that resulted in the
open positions to be transferred pursuant to Rule 20.10(a)(2) were
already guaranteed by a clearing member of The Options Clearing
Corporation (``OCC''), and the positions may not be closed pursuant to
the transfer and will continue to be subject to OCC rules, as they will
continue to be held in an account with an OCC clearing member.
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 to address competitive issues. The Exchange does not
believe that the proposed rule change will impose any burden on
intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act because the proposed rule change
will apply to all market participants in the same manner. All market
participants will be able to effect off-floor position transfers
pursuant to Rule 20.10(a)(2) on a recurring or routine basis without
providing the Exchange with notice of such transfers. The Exchange does
not believe the proposed rule change will impose any burden on
intermarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act because it relates solely to the
notice required for off-floor transfers that may occur today, and the
frequency with which those transfers may occur. These transfers will
continue to not result in a change in ownership or netting, and thus
will have no impact on outstanding option positions.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\
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 \11\ and Rule 19b-4(f)(6) \12\
thereunder.
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\9\ 15 U.S.C. 78s(b)(3)(A)(iii).
\10\ 17 CFR 240.19b-4(f)(6).
\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6).
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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-CboeBZX-2020-058 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-2020-058. 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; 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-CboeBZX-2020-058 and should
be submitted on or before September 4, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-17758 Filed 8-13-20; 8:45 am]
BILLING CODE 8011-01-P
