Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Pilot Programs in Connection With the Listing and Trading of P.M.-Settled Series on Certain Broad-Based Index Options, 68378-68381 [2020-23799]
Download as PDF
<![CDATA[
68378
Federal Register / Vol. 85, No. 209 / Wednesday, October 28, 2020 / Notices
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.
jbell on DSKJLSW7X2PROD with NOTICES
II. Docketed Proceeding(s)
1. Docket No(s).: MC2021–20 and
CP2021–21; Filing Title: USPS Request
to Add Priority Mail Contract 677 to
Competitive Product List and Notice of
Filing Materials Under Seal; Filing
Acceptance Date: October 22, 2020;
Filing Authority: 39 U.S.C. 3642, 39 CFR
3040.130 through 3040.135, and 39 CFR
3035.105; Public Representative:
Jennaca D. Upperman; Comments Due:
October 30, 2020.
2. Docket No(s).: MC2021–21 and
CP2021–22; Filing Title: USPS Request
to Add Priority Mail Contract 678 to
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).
VerDate Sep<11>2014
18:29 Oct 27, 2020
Jkt 253001
Competitive Product List and Notice of
Filing Materials Under Seal; Filing
Acceptance Date: October 22, 2020;
Filing Authority: 39 U.S.C. 3642, 39 CFR
3040.130 through 3040.135, and 39 CFR
3035.105; Public Representative:
Jennaca D. Upperman; Comments Due:
October 30, 2020.
This Notice will be published in the
Federal Register.
Erica A. Barker,
Secretary.
[FR Doc. 2020–23872 Filed 10–27–20; 8:45 am]
BILLING CODE 7710–FW–P
SECURITIES AND EXCHANGE
COMMISSION
[Release Nos. 33–10877; 34–90260; File No.
265–32]
SEC Small Business Capital Formation
Advisory Committee
Securities and Exchange
Commission.
ACTION: Notice of meeting.
AGENCY:
The Securities and Exchange
Commission Small Business Capital
Formation Advisory Committee,
established pursuant to Section 40 of
the Securities Exchange Act of 1934 as
added by the SEC Small Business
Advocate Act of 2016, is providing
notice that it will hold a public meeting
by videoconference. The public is
invited to submit written statements to
the Committee.
DATES: The meeting will be held on
Monday, November 9, 2020, from 10:00
a.m. to 2:30 p.m. (ET) and will be open
to the public. Written statements should
be received on or before November 9,
2020.
SUMMARY:
The meeting will be
conducted by remote means
(videoconference). Members of the
public may attend the meeting by
viewing the webcast on the
Commission’s website at www.sec.gov.
Written statements may be submitted by
any of the following methods:
ADDRESSES:
Electronic Statements
• Use the Commission’s internet
submission form (https://www.sec.gov/
rules/submitcomments.htm); or
• Send an email message to rulecomments@sec.gov. Please include File
Number 265–32 on the subject line; or
Paper Statements
• Send paper statements to Vanessa
A. Countryman, Secretary, Securities
and Exchange Commission, 100 F Street
NE, Washington, DC 20549–1090.
PO 00000
Frm 00094
Fmt 4703
Sfmt 4703
All submissions should refer to File No.
265–32. This file number should be
included on the subject line if email is
used. To help us process and review
your statement more efficiently, please
use only one method. The Commission
will post all statements on the SEC’s
website at www.sec.gov.
Statements also 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. (ET).
All statements received will be posted
without change; we do not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly.
FOR FURTHER INFORMATION CONTACT: Julie
Z. Davis, Senior Special Counsel, Office
of the Advocate for Small Business
Capital Formation, at (202) 551–5407,
Securities and Exchange Commission,
100 F Street NE, Washington, DC
20549–3628.
SUPPLEMENTARY INFORMATION: The
meeting will be open to the public.
Persons needing special
accommodations because of a disability
should notify the contact person listed
in the section above entitled FOR
FURTHER INFORMATION CONTACT. The
agenda for the meeting includes matters
relating to rules and regulations
affecting small and emerging companies
and their investors under the federal
securities laws.
Dated: October 23, 2020.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2020–23834 Filed 10–27–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–90255; File No. SR–
CboeBZX–2020–076]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Extend the
Pilot Programs in Connection With the
Listing and Trading of P.M.-Settled
Series on Certain Broad-Based Index
Options
October 22, 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 October
1 15
2 17
E:\FR\FM\28OCN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
28OCN1
Federal Register / Vol. 85, No. 209 / Wednesday, October 28, 2020 / Notices
13, 2020, Cboe BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX 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 BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX Options’’)
proposes to extend the pilot programs in
connection with the listing and trading
of P.M.-settled series on certain broadbased index options. The text of the
proposed rule change is provided in
Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
equities/regulation/rule_filings/bzx/), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
jbell on DSKJLSW7X2PROD with NOTICES
1. Purpose
The proposed rule change extends the
listing and trading of P.M.-settled series
on certain broad-based index options on
a pilot basis.5 Rule 29.11(a)(6) currently
3 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
5 The Exchange is authorized to list for trading
options that overlie the Mini-SPX Index (‘‘XSP’’)
and the Russell 2000 Index (‘‘RUT’’). See Rule
29.11(a). See also Securities Exchange Act Release
Nos. 84480 (October 24, 2018), 83 FR 54635
(October 30, 2018) (Notice of Filing of a Proposed
4 17
VerDate Sep<11>2014
18:29 Oct 27, 2020
Jkt 253001
permits the listing and trading of XSP
options with third-Friday-of-the-month
expiration dates, whose exercise
settlement value will be based on the
closing index value on the expiration
day (‘‘P.M.-settled’’) on a pilot basis set
to expire on November 2, 2020 (the
‘‘XSPPM Pilot Program’’). Rule
29.11(j)(3) also permits the listing and
trading of P.M.-settled options on broadbased indexes with weekly expirations
(‘‘Weeklys’’) and end-of-month
expirations (‘‘EOMs’’) on a pilot basis
set to expire on November 2, 2020 (the
‘‘Nonstandard Expirations Pilot
Program’’, and together with the XSPPM
Pilot Program, the ‘‘Pilot Programs’’).
The Exchange proposes to extend the
Pilot Programs through May 3, 2021.
XSPPM Pilot Program
Rule 29.11(a)(6) permits the listing
and trading, in addition to A.M.-settled
XSP options, of P.M.-settled XSP
options with third-Friday-of-the-month
expiration dates on a pilot basis. The
Exchange believes that continuing to
permit the trading of XSP options on a
P.M.-settled basis will continue to
encourage greater trading in XSP
options. Other than settlement and
closing time on the last trading day
(pursuant to Rule 29.10(a)) 6, contract
terms for P.M.-settled XSP options are
the same as the A.M.-settled XSP
options. The contract uses a $100
multiplier and the minimum trading
increments, strike price intervals, and
expirations are the same as the A.M.settled XSP option series. P.M.-settled
XSP options have European-style
exercise. The Exchange also has
flexibility to open for trading additional
series in response to customer demand.
Rule Change To Permit the Listing and Trading of
P.M.-Settled Series on Certain Broad-Based Index
Options on a Pilot Basis) (SR–CboeBZX–2018–066)
(‘‘Notice’’); 85181 (February 22, 2019), 84 FR 6842
(February 28, 2019) (Notice of Deemed Approval of
a Proposed Rule Change To Permit the Listing and
Trading of P.M.-Settled Series on Certain BroadBased Index Options on a Pilot Basis) (SR–
CboeBZX–2018–066); 88052 (January 27, 2020), 85
FR 5753 (January 31, 2020) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change
To Extend the Pilot Programs in Connection With
the Listing and Trading of P.M.-Settled Series on
Certain Broad-Based Index Options) (SR–CboeBZX–
2020–004); and 88788 (April 30, 2020) 85 FR 27008
(May 6, 2020) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change To Extend
the Pilot Programs in Connection With the Listing
and Trading of P.M.-Settled Series on Certain
Broad-Based Index Options) (SR–CboeBZX–2020–
038).
6 Rule 29.10(a) permits transactions in P.M.settled XSP options on their last trading day to be
effected on the Exchange between the hours of 9:30
a.m. and 4:00 p.m. Eastern time. All other
transactions in index options are effected on the
Exchange between the hours of 9:30 a.m. and 4:15
p.m. Eastern time.
PO 00000
Frm 00095
Fmt 4703
Sfmt 4703
68379
If the Exchange were to propose
another extension of the XSPPM Pilot
Program or should the Exchange
propose to make the XSPPM Pilot
Program permanent, the Exchange
would submit a filing proposing such
amendments to the XSPPM Pilot
Program. Further, any positions
established under the XSPPM Pilot
Program would not be impacted by the
expiration of the XSPPM Pilot Program.
For example, if the Exchange lists a
P.M.-settled XSP option that expires
after the XSPPM Pilot Program expires
(and is not extended), then those
positions would continue to exist. If the
pilot were not extended, then the
positions could continue to exist.
However, any further trading in those
series would be restricted to
transactions where at least one side of
the trade is a closing transaction.
As part of the XSPPM Pilot Program,
the Exchange submits a pilot report to
the Commission at least two months
prior to the expiration date of the pilot.
This annual report contains an analysis
of volume, open interest, and trading
patterns. In proposing to extend the
XSPPM Pilot Program, the Exchange
will continue to abide by the reporting
requirements described in the Notice.7
Additionally, the Exchange will provide
the Commission with any additional
data or analyses the Commission
requests because it deems such data or
analyses necessary to determine
whether the XSPPM Pilot Program is
consistent with the Exchange Act. The
Exchange is in the process of making
public on its website data and analyses
previously submitted to the Commission
under the Pilot Program, and will make
public any data and analyses it submits
to the Commission under the Pilot
Program in the future. The Exchange
also notes that its affiliated options
exchange, Cboe Exchange, Inc. (‘‘Cboe
Options’’) currently has pilots that
permit P.M.-settled third Friday-of-themonth XSP options.8
Nonstandard Expirations Pilot Program
Rule 29.11(j)(1) permits the listing
and trading, on a pilot basis, of P.M.settled options on broad-based indexes
with nonstandard expiration dates and
is currently set to expire on November
2, 2020. The Nonstandard Expirations
Pilot Program permits both Weeklys and
EOMs as discussed below. Contract
terms for the Weekly and EOM
expirations are similar to those of the
A.M.-settled broad-based index options,
except that the Weekly and EOM
expirations are P.M.-settled.
7 See
8 See
E:\FR\FM\28OCN1.SGM
supra note 5.
Cboe Options Rule 4.13.13.
28OCN1
jbell on DSKJLSW7X2PROD with NOTICES
68380
Federal Register / Vol. 85, No. 209 / Wednesday, October 28, 2020 / Notices
In particular, Rule 29.11(j)(1) permits
the Exchange to open for trading
Weeklys on any broad-based index
eligible for standard options trading to
expire on any Monday, Wednesday, or
Friday (other than the third Friday-ofthe-month or days that coincide with an
EOM). Weeklys are subject to all
provisions of Rule 29.11 and are treated
the same as options on the same
underlying index that expire on the
third Friday of the expiration month.
However, under the Nonstandard
Expirations Pilot Program, Weeklys are
P.M.-settled, and new Weekly series
may be added up to and including on
the expiration date for an expiring
Weekly.
Rule 29.11(a)(2) permits the Exchange
to open for trading EOMs on any broadbased index eligible for standard
options trading to expire on the last
trading day of the month. EOMs are
subject to all provisions of Rule 29.11
and treated the same as options on the
same underlying index that expire on
the third Friday of the expiration
month. However, under the
Nonstandard Expirations Pilot Program,
EOMs are P.M.-settled, and new series
of EOMs may be added up to and
including on the expiration date for an
expiring EOM.
As stated above, this proposed rule
change extends the Nonstandard
Expirations Pilot Program for broadbased index options on a pilot basis, for
a period of six months. If the Exchange
were to propose an additional extension
of the Nonstandard Expirations Pilot
Program or should the Exchange
propose to make it permanent, the
Exchange would submit additional
filings proposing such amendments.
Further, any positions established under
the Nonstandard Expirations Pilot
Program would not be impacted by the
expiration of the pilot. For example, if
the Exchange lists a Weekly or EOM that
expires after the Nonstandard
Expirations Pilot Program expires (and
is not extended), then those positions
would continue to exist. However, any
further trading in those series would be
restricted to transactions where at least
one side of the trade is a closing
transaction.
As part of the Nonstandard
Expirations Pilot Program, the Exchange
submits a pilot report to the
Commission at least two months prior to
the expiration date of the pilot. This
annual report contains an analysis of
volume, open interest, and trading
patterns. In proposing to extend the
Nonstandard Expirations Pilot Program,
the Exchange will continue to abide by
the reporting requirements described in
VerDate Sep<11>2014
18:29 Oct 27, 2020
Jkt 253001
the Notice.9 Additionally, the Exchange
will provide the Commission with any
additional data or analyses the
Commission requests because it deems
such data or analyses necessary to
determine whether the Nonstandard
Expirations Pilot Program is consistent
with the Exchange Act. The Exchange is
in the process of making public on its
website data and analyses previously
submitted to the Commission under the
Pilot Program, and will make public any
data and analyses it submits to the
Commission under the Pilot Program in
the future. The Exchange notes that
other exchanges, including its affiliated
exchange, Cboe Options, currently have
pilots that have weekly and end-ofmonth expirations.10
Additional Information
The Exchange believes there is
sufficient investor interest and demand
in the XSPPM and Nonstandard
Expirations Pilot Programs to warrant
their extension. The Exchange believes
that the Programs have provided
investors with additional means of
managing their risk exposures and
carrying out their investment objectives.
The proposed extensions will continue
to offer investors the benefit of added
transparency, price discovery, and
stability, as well as the continued
expanded trading opportunities in
connection with different expiration
times. The Exchange proposes the
extension of the Pilot Programs in order
to continue to give the Commission
more time to consider the impact of the
Pilot Programs. To this point, the
Exchange believes that the Pilot
Programs have been well-received by its
Members and the investing public, and
the Exchange would like to continue to
provide investors with the ability to
trade P.M.-settled XSP options and
contracts with nonstandard expirations.
All terms regarding the trading of the
Pilot Products shall continue to operate
as described in the XSPPM and
Nonstandard Expirations Notice.11 The
Exchange merely proposes herein to
extend the terms of the Pilot Programs
to May 3, 2021.
Furthermore, the Exchange has not
experienced any adverse market effects
with respect to the Programs. The
Exchange will continue to monitor for
any such disruptions or the
development of any factors that would
cause such disruptions. The Exchange
represents it continues to have an
adequate surveillance program in place
9 See
supra note 5.
Cboe Options Rule 4.13(e); and Phlx Rule
1101A(b)(5).
11 See supra note 5.
for index options and that the proposed
extension will not have an adverse
impact on capacity.
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.12 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 13 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.
In particular, the Exchange believes
that the proposed extension of the Pilot
Programs will continue to provide
greater opportunities for investors. The
Exchange believes that the Pilot
Programs have been successful to date.
The proposed rule change allows for an
extension of the Program for the benefit
of market participants. The Exchange
believes that there is demand for the
expirations offered under the Program
and believes that P.M.-settled XSP,
Weekly Expirations and EOMs will
continue to provide the investing public
and other market participants with the
opportunities to trade desirable
products and to better manage their risk
exposure. The proposed extension will
also provide the Commission further
opportunity to observe such trading of
the Pilot Products. Further, the
Exchange has not encountered any
problems with the Programs; it has not
experienced any adverse effects or
meaningful regulatory or capacity
concerns from the operation of the Pilot
Programs. Also, the Exchange believes
that such trading pursuant to the
XSPPM Pilot Program has not, and will
not, adversely impact fair and orderly
markets on Expiration Fridays for the
underlying stocks comprising the S&P
500 index.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
10 See
PO 00000
Frm 00096
Fmt 4703
Sfmt 4703
12 15
13 15
E:\FR\FM\28OCN1.SGM
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
28OCN1
Federal Register / Vol. 85, No. 209 / Wednesday, October 28, 2020 / Notices
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 Pilot Programs, 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.
Specifically, the Exchange does not
believe the continuation of the Pilot
Program will impose any unnecessary or
inappropriate burden on intramarket
competition because it will continue to
apply equally to all BZX Options market
participants, and the Pilot Products will
continue to be available to all BZX
Options market participants. The
Exchange believes there is sufficient
investor interest and demand in the
Pilot Programs to warrant its extension.
The Exchange believes that, for the
period that the Pilot Programs has been
in operation, it has provided investors
with desirable products with which to
trade. Furthermore, as stated above, the
Exchange maintains that it has not
experienced any adverse market effects
or regulatory concerns with respect to
the Pilot Programs. The Exchange
further does not believe that the
proposed extension of the Pilot
Programs will impose any burden on
intermarket competition that is not
necessary or appropriate in furtherance
of the purposes of the Act because it
only applies to trading on BZX Options.
To the extent that the continued trading
of the Pilot Products may make BZX
Options a more attractive marketplace to
market participants at other exchanges,
such market participants may elect to
become BZX Options market
participants.
jbell on DSKJLSW7X2PROD with NOTICES
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 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
VerDate Sep<11>2014
18:29 Oct 27, 2020
Jkt 253001
become effective pursuant to Section
19(b)(3)(A) of the Act 14 and
subparagraph (f)(6) of Rule 19b-4
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 investors may
continue to trade options that are part
of the Pilot Programs on an
uninterrupted basis. 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 Pilot
Programs to continue uninterrupted,
thereby avoiding investor confusion that
could result from a temporary
interruption in the Pilot Programs.
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.
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:
14 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
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).
15 17
PO 00000
Frm 00097
Fmt 4703
Sfmt 9990
68381
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–2020–076 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–2020–076. 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–CboeBZX–2020–076, and
should be submitted on or before
November 18, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–23799 Filed 10–27–20; 8:45 am]
BILLING CODE 8011–01–P
19 17
E:\FR\FM\28OCN1.SGM
CFR 200.30–3(a)(12).
28OCN1
]]>Agencies
[Federal Register Volume 85, Number 209 (Wednesday, October 28, 2020)]
[Notices]
[Pages 68378-68381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-23799]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-90255; File No. SR-CboeBZX-2020-076]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Extend
the Pilot Programs in Connection With the Listing and Trading of P.M.-
Settled Series on Certain Broad-Based Index Options
October 22, 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 October
[[Page 68379]]
13, 2020, Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX 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 BZX Exchange, Inc. (the ``Exchange'' or ``BZX Options'')
proposes to extend the pilot programs in connection with the listing
and trading of P.M.-settled series on certain broad-based index
options. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's website (https://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The proposed rule change extends the listing and trading of P.M.-
settled series on certain broad-based index options on a pilot
basis.\5\ Rule 29.11(a)(6) currently permits the listing and trading of
XSP options with third-Friday-of-the-month expiration dates, whose
exercise settlement value will be based on the closing index value on
the expiration day (``P.M.-settled'') on a pilot basis set to expire on
November 2, 2020 (the ``XSPPM Pilot Program''). Rule 29.11(j)(3) also
permits the listing and trading of P.M.-settled options on broad-based
indexes with weekly expirations (``Weeklys'') and end-of-month
expirations (``EOMs'') on a pilot basis set to expire on November 2,
2020 (the ``Nonstandard Expirations Pilot Program'', and together with
the XSPPM Pilot Program, the ``Pilot Programs''). The Exchange proposes
to extend the Pilot Programs through May 3, 2021.
---------------------------------------------------------------------------
\5\ The Exchange is authorized to list for trading options that
overlie the Mini-SPX Index (``XSP'') and the Russell 2000 Index
(``RUT''). See Rule 29.11(a). See also Securities Exchange Act
Release Nos. 84480 (October 24, 2018), 83 FR 54635 (October 30,
2018) (Notice of Filing of a Proposed Rule Change To Permit the
Listing and Trading of P.M.-Settled Series on Certain Broad-Based
Index Options on a Pilot Basis) (SR-CboeBZX-2018-066) (``Notice'');
85181 (February 22, 2019), 84 FR 6842 (February 28, 2019) (Notice of
Deemed Approval of a Proposed Rule Change To Permit the Listing and
Trading of P.M.-Settled Series on Certain Broad-Based Index Options
on a Pilot Basis) (SR-CboeBZX-2018-066); 88052 (January 27, 2020),
85 FR 5753 (January 31, 2020) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change To Extend the Pilot Programs
in Connection With the Listing and Trading of P.M.-Settled Series on
Certain Broad-Based Index Options) (SR-CboeBZX-2020-004); and 88788
(April 30, 2020) 85 FR 27008 (May 6, 2020) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Extend the
Pilot Programs in Connection With the Listing and Trading of P.M.-
Settled Series on Certain Broad-Based Index Options) (SR-CboeBZX-
2020-038).
---------------------------------------------------------------------------
XSPPM Pilot Program
Rule 29.11(a)(6) permits the listing and trading, in addition to
A.M.-settled XSP options, of P.M.-settled XSP options with third-
Friday-of-the-month expiration dates on a pilot basis. The Exchange
believes that continuing to permit the trading of XSP options on a
P.M.-settled basis will continue to encourage greater trading in XSP
options. Other than settlement and closing time on the last trading day
(pursuant to Rule 29.10(a)) \6\, contract terms for P.M.-settled XSP
options are the same as the A.M.-settled XSP options. The contract uses
a $100 multiplier and the minimum trading increments, strike price
intervals, and expirations are the same as the A.M.-settled XSP option
series. P.M.-settled XSP options have European-style exercise. The
Exchange also has flexibility to open for trading additional series in
response to customer demand.
---------------------------------------------------------------------------
\6\ Rule 29.10(a) permits transactions in P.M.-settled XSP
options on their last trading day to be effected on the Exchange
between the hours of 9:30 a.m. and 4:00 p.m. Eastern time. All other
transactions in index options are effected on the Exchange between
the hours of 9:30 a.m. and 4:15 p.m. Eastern time.
---------------------------------------------------------------------------
If the Exchange were to propose another extension of the XSPPM
Pilot Program or should the Exchange propose to make the XSPPM Pilot
Program permanent, the Exchange would submit a filing proposing such
amendments to the XSPPM Pilot Program. Further, any positions
established under the XSPPM Pilot Program would not be impacted by the
expiration of the XSPPM Pilot Program. For example, if the Exchange
lists a P.M.-settled XSP option that expires after the XSPPM Pilot
Program expires (and is not extended), then those positions would
continue to exist. If the pilot were not extended, then the positions
could continue to exist. However, any further trading in those series
would be restricted to transactions where at least one side of the
trade is a closing transaction.
As part of the XSPPM Pilot Program, the Exchange submits a pilot
report to the Commission at least two months prior to the expiration
date of the pilot. This annual report contains an analysis of volume,
open interest, and trading patterns. In proposing to extend the XSPPM
Pilot Program, the Exchange will continue to abide by the reporting
requirements described in the Notice.\7\ Additionally, the Exchange
will provide the Commission with any additional data or analyses the
Commission requests because it deems such data or analyses necessary to
determine whether the XSPPM Pilot Program is consistent with the
Exchange Act. The Exchange is in the process of making public on its
website data and analyses previously submitted to the Commission under
the Pilot Program, and will make public any data and analyses it
submits to the Commission under the Pilot Program in the future. The
Exchange also notes that its affiliated options exchange, Cboe
Exchange, Inc. (``Cboe Options'') currently has pilots that permit
P.M.-settled third Friday-of-the-month XSP options.\8\
---------------------------------------------------------------------------
\7\ See supra note 5.
\8\ See Cboe Options Rule 4.13.13.
---------------------------------------------------------------------------
Nonstandard Expirations Pilot Program
Rule 29.11(j)(1) permits the listing and trading, on a pilot basis,
of P.M.-settled options on broad-based indexes with nonstandard
expiration dates and is currently set to expire on November 2, 2020.
The Nonstandard Expirations Pilot Program permits both Weeklys and EOMs
as discussed below. Contract terms for the Weekly and EOM expirations
are similar to those of the A.M.-settled broad-based index options,
except that the Weekly and EOM expirations are P.M.-settled.
[[Page 68380]]
In particular, Rule 29.11(j)(1) permits the Exchange to open for
trading Weeklys on any broad-based index eligible for standard options
trading to expire on any Monday, Wednesday, or Friday (other than the
third Friday-of-the-month or days that coincide with an EOM). Weeklys
are subject to all provisions of Rule 29.11 and are treated the same as
options on the same underlying index that expire on the third Friday of
the expiration month. However, under the Nonstandard Expirations Pilot
Program, Weeklys are P.M.-settled, and new Weekly series may be added
up to and including on the expiration date for an expiring Weekly.
Rule 29.11(a)(2) permits the Exchange to open for trading EOMs on
any broad-based index eligible for standard options trading to expire
on the last trading day of the month. EOMs are subject to all
provisions of Rule 29.11 and treated the same as options on the same
underlying index that expire on the third Friday of the expiration
month. However, under the Nonstandard Expirations Pilot Program, EOMs
are P.M.-settled, and new series of EOMs may be added up to and
including on the expiration date for an expiring EOM.
As stated above, this proposed rule change extends the Nonstandard
Expirations Pilot Program for broad-based index options on a pilot
basis, for a period of six months. If the Exchange were to propose an
additional extension of the Nonstandard Expirations Pilot Program or
should the Exchange propose to make it permanent, the Exchange would
submit additional filings proposing such amendments. Further, any
positions established under the Nonstandard Expirations Pilot Program
would not be impacted by the expiration of the pilot. For example, if
the Exchange lists a Weekly or EOM that expires after the Nonstandard
Expirations Pilot Program expires (and is not extended), then those
positions would continue to exist. However, any further trading in
those series would be restricted to transactions where at least one
side of the trade is a closing transaction.
As part of the Nonstandard Expirations Pilot Program, the Exchange
submits a pilot report to the Commission at least two months prior to
the expiration date of the pilot. This annual report contains an
analysis of volume, open interest, and trading patterns. In proposing
to extend the Nonstandard Expirations Pilot Program, the Exchange will
continue to abide by the reporting requirements described in the
Notice.\9\ Additionally, the Exchange will provide the Commission with
any additional data or analyses the Commission requests because it
deems such data or analyses necessary to determine whether the
Nonstandard Expirations Pilot Program is consistent with the Exchange
Act. The Exchange is in the process of making public on its website
data and analyses previously submitted to the Commission under the
Pilot Program, and will make public any data and analyses it submits to
the Commission under the Pilot Program in the future. The Exchange
notes that other exchanges, including its affiliated exchange, Cboe
Options, currently have pilots that have weekly and end-of-month
expirations.\10\
---------------------------------------------------------------------------
\9\ See supra note 5.
\10\ See Cboe Options Rule 4.13(e); and Phlx Rule 1101A(b)(5).
---------------------------------------------------------------------------
Additional Information
The Exchange believes there is sufficient investor interest and
demand in the XSPPM and Nonstandard Expirations Pilot Programs to
warrant their extension. The Exchange believes that the Programs have
provided investors with additional means of managing their risk
exposures and carrying out their investment objectives. The proposed
extensions will continue to offer investors the benefit of added
transparency, price discovery, and stability, as well as the continued
expanded trading opportunities in connection with different expiration
times. The Exchange proposes the extension of the Pilot Programs in
order to continue to give the Commission more time to consider the
impact of the Pilot Programs. To this point, the Exchange believes that
the Pilot Programs have been well-received by its Members and the
investing public, and the Exchange would like to continue to provide
investors with the ability to trade P.M.-settled XSP options and
contracts with nonstandard expirations. All terms regarding the trading
of the Pilot Products shall continue to operate as described in the
XSPPM and Nonstandard Expirations Notice.\11\ The Exchange merely
proposes herein to extend the terms of the Pilot Programs to May 3,
2021.
---------------------------------------------------------------------------
\11\ See supra note 5.
---------------------------------------------------------------------------
Furthermore, the Exchange has not experienced any adverse market
effects with respect to the Programs. The Exchange will continue to
monitor for any such disruptions or the development of any factors that
would cause such disruptions. The Exchange represents it continues to
have an adequate surveillance program in place for index options and
that the proposed extension will not have an adverse impact on
capacity.
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.\12\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \13\ 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.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
In particular, the Exchange believes that the proposed extension of
the Pilot Programs will continue to provide greater opportunities for
investors. The Exchange believes that the Pilot Programs have been
successful to date. The proposed rule change allows for an extension of
the Program for the benefit of market participants. The Exchange
believes that there is demand for the expirations offered under the
Program and believes that P.M.-settled XSP, Weekly Expirations and EOMs
will continue to provide the investing public and other market
participants with the opportunities to trade desirable products and to
better manage their risk exposure. The proposed extension will also
provide the Commission further opportunity to observe such trading of
the Pilot Products. Further, the Exchange has not encountered any
problems with the Programs; it has not experienced any adverse effects
or meaningful regulatory or capacity concerns from the operation of the
Pilot Programs. Also, the Exchange believes that such trading pursuant
to the XSPPM Pilot Program has not, and will not, adversely impact fair
and orderly markets on Expiration Fridays for the underlying stocks
comprising the S&P 500 index.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose
[[Page 68381]]
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 Pilot Programs, 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.
Specifically, the Exchange does not believe the continuation of the
Pilot Program will impose any unnecessary or inappropriate burden on
intramarket competition because it will continue to apply equally to
all BZX Options market participants, and the Pilot Products will
continue to be available to all BZX Options market participants. The
Exchange believes there is sufficient investor interest and demand in
the Pilot Programs to warrant its extension. The Exchange believes
that, for the period that the Pilot Programs has been in operation, it
has provided investors with desirable products with which to trade.
Furthermore, as stated above, the Exchange maintains that it has not
experienced any adverse market effects or regulatory concerns with
respect to the Pilot Programs. The Exchange further does not believe
that the proposed extension of the Pilot Programs will impose any
burden on intermarket competition that is not necessary or appropriate
in furtherance of the purposes of the Act because it only applies to
trading on BZX Options. To the extent that the continued trading of the
Pilot Products may make BZX Options a more attractive marketplace to
market participants at other exchanges, such market participants may
elect to become BZX Options market participants.
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 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 subparagraph (f)(6) of Rule 19b-4
thereunder.\15\
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6). In addition, Rule19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------
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
investors may continue to trade options that are part of the Pilot
Programs on an uninterrupted basis. 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 Pilot Programs
to continue uninterrupted, thereby avoiding investor confusion that
could result from a temporary interruption in the Pilot Programs.
Accordingly, the Commission hereby waives the operative delay and
designates the proposed rule change operative upon filing.\18\
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
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-CboeBZX-2020-076 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-2020-076. 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-CboeBZX-2020-076, and should be
submitted on or before November 18, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
---------------------------------------------------------------------------
\19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-23799 Filed 10-27-20; 8:45 am]
BILLING CODE 8011-01-P
