Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Amend Rule 5.1, 68614-68616 [2020-23920]
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68614
Federal Register / Vol. 85, No. 210 / Thursday, October 29, 2020 / Notices
This meeting will begin at 10:00
a.m. (ET) and will be open to the public
via audio webcast only on the
Commission’s website at https://
www.sec.gov.
MATTERS TO BE CONSIDERED: The
Commission will consider whether to
adopt rule amendments to facilitate
capital formation and increase
opportunities for investors by
expanding access to capital for small
and medium-sized businesses and
entrepreneurs across the United States.
Specifically, the Commission will
consider whether to adopt rule
amendments to simplify, harmonize,
and improve certain aspects of the
framework for exemptions from
registration under the Securities Act of
1933 to promote capital formation while
preserving or enhancing important
investor protections and reducing
complexities in the exempt offering
framework that may impede access to
investment opportunities for investors
and access to capital for businesses and
entrepreneurs.
STATUS:
Dated: October 26, 2020.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–24043 Filed 10–27–20; 11:15 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–90267; File No. SR–CBOE–
2020–102]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating To Amend Rule
5.1
jbell on DSKJLSW7X2PROD with NOTICES
October 23, 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
14, 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
2
18:03 Oct 28, 2020
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe Exchange, Inc. (the ‘‘Exchange’’
or ‘‘Cboe Options’’) proposes to amend
Rule 5.1. The text of the proposed rule
change is provided below.
(additions are italics; deletions are
[bracketed])
*
*
*
*
*
Cboe Exchange, Inc. Rules
*
*
*
*
*
Rule 5.1. Trading Days and Hours
(a) No change.
(b) Regular Trading Hours.
(1) No change.
(2) Index Options. Except as
otherwise set forth in the Rules or under
unusual conditions as may be
determined by the Exchange, Regular
Trading Hours for transactions in index
options are from 9:30 a.m. to 4:15 p.m.,
except as follows:
(A) Regular Trading Hours for the
following index options are from 9:30
a.m. to 4:00 p.m.:
MSCI EAFE Index (EAFE)
MSCI Emerging Markets Index (EM)
*
*
*
*
*
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
Currently, pursuant to Rule 5.1(b)(2),
MSCI EAFE Index (‘‘EAFE’’) and MSCI
Emerging Markets Index (‘‘EM’’) options
15 U.S.C. 78s(b)(1).
17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
1
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comments on the proposed rule change
from interested persons.
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trade on the Exchange from 9:30 a.m.
until 4:15 p.m. Eastern time. The
Exchange proposes to amend Rule
5.1(b)(2)(A) to add EAFE and EM
options to the list of index options that
may trade on the Exchange from 9:30
a.m. until 4:00 p.m. Eastern time.
By way of background, the Exchange
currently lists and trades EAFE and EM
options (collectively, ‘‘MSCI Index’’
options). The EAFE Index is designed to
captures large and mid-cap
representation across 21 developed
markets countries (excluding the U.S.
and Canada) with 902 constituents,
which cover approximately 85% of the
free float-adjusted market capitalization
in each country. The EM Index is
designed to capture large and mid-cap
representation across emerging market
countries across 26 emerging markets
country indexes with 1,388
constituents, which cover
approximately 85% of the free floatadjusted market capitalization in each
country. The Exchange understands that
investors trade options on MSCI Indexes
often use the prices of the exchangetraded funds (‘‘ETFs’’) derived from the
MSCI Indexes (e.g., iShares MSCI EAFE
and EM ETFs), the components of
which are stocks that are components of
the MSCI Indexes, to price options
rather than futures on the MSCI Indexes
(which are often used to price index
options, such as options on the S&P
500). The related ETFs end regular
trading at 4:00 p.m. Eastern time each
day. Closing trading in the MSCI Index
options at the same time the correlated
ETFs end regular trading 5 will ensure
investors have access to robust pricing
of the ETFs, the underlying stock
components of which are stocks that are
components of the MSCI Indexes, they
use to price the options, thus will
reduce investors’ price risk. Other index
options may currently trade from 9:30
a.m. to 4:00 p.m. Eastern time.6
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
5 While the stocks may continue to trade in an
aftermarket trading session on the listing exchanges,
there is less liquidity in aftermarket trading, which
generally leads to wider spreads and more volatile
pricing.
6 See Rule 5.1(b)(2)(A), pursuant to which options
on the various S&P Select Sector Indexes may trade.
Investors similarly use pricing of the underlying
stocks of the Sector Indexes to price options and
shares of ETFs derived from the Sector Indexes. See
also Securities Exchange Act Release No. 83112
(April 26, 2018), 83 FR 19365 (May 5, 2018) (SR–
CBOE–2018–030).
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Federal Register / Vol. 85, No. 210 / Thursday, October 29, 2020 / Notices
jbell on DSKJLSW7X2PROD with NOTICES
Section 6(b) of the Act.7 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 8 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) 9 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, closing trading in the
MSCI Index options at the same time the
related ETFs end regular trading will
ensure investors have access to robust
pricing of the correlated ETFs (the
underlying stock components of which
are also components of the MSCI
Indexes) they use to price the options,
which protects investors by reducing
their price risk. Indeed, the Exchange
notes that a number of Trading Permit
Holders (‘‘TPHs’’) have expressed to the
Exchange that aligning the close of
trading in the MSCI Index options
would reduce their pricing risk at the
end of the trading day. Additionally, the
Exchange believes lack of ETF pricing
may cause Market-Makers to widen
their quote spreads and reduce their
quote sizes for the part of the options
trading day during which ETF pricing is
not available. The Exchange believes the
proposed rule change will, therefore,
help maintain meaningful liquidity in
the MSCI Index options market, which
liquidity may otherwise be impacted if
appointed Market-Makers quote during
times when pricing for the related ETFs
is unavailable. Also, as noted above,
other index options may trade from 9:30
a.m. to 4:00 p.m. Eastern time.10
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
Exchange does not believe the proposed
rule change will impose any burden on
15 U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(5).
9 Id.
10 See supra note 2.
7
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18:03 Oct 28, 2020
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intramarket competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, because all
market participants will be able to trade
MSCI Index options during the same
trading hours. Other index options may
currently trade from 9:30 a.m. to 4:00
p.m. Eastern time, which close at 4:00
p.m. Eastern time to similarly align with
the corresponding underlying stock
prices.11 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,
and may promote competition, because
the proposed rule change will align the
trading hours for options on the MSCI
Indexes with the trading hours of
correlated ETFs, which are comprised of
the underlying shares that comprise
these indexes. Additionally, MSCI Index
options trade exclusively on Cboe
Options. To the extent that the proposed
changes make Cboe Options a more
attractive marketplace for market
participants at other exchanges, such
market participants are welcome to
become Cboe Options market
participant.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 12 and Rule 19b–
4(f)(6) thereunder.13
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 14 normally does not become
operative for 30 days after the date of its
See supra note 2.
15 U.S.C. 78s(b)(3)(A).
13 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
14 17 CFR 240.19b–4(f)(6).
11
12
PO 00000
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68615
filing. However, Rule 19b–4(f)(6)(iii) 15
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. The Exchange believes
that waiver of the operative delay is
consistent with the protection of
investors and the public interest
because the proposed rule change does
not raise any novel or unique issues not
previously considered by the
Commission. The Exchange notes that
the proposed rule change applies to
MSCI Index options trading hours
currently applicable to other index
options of which the components
underlying such indexes and the related
ETFs stop trading at 4:00 p.m. Eastern
time. Accordingly, the Commission
believes that waiver of the 30-day
operative delay is consistent with the
protection of investors and the public
interest. The Commission hereby waives
the operative delay and designates the
proposal as operative upon filing.16
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 rule-comments@
sec.gov. Please include File Number
SR–CBOE–2020–102 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
17 CFR 240.19b–4(f)(6)(iii).
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
16
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68616
Federal Register / Vol. 85, No. 210 / Thursday, October 29, 2020 / Notices
Commission, 100 F Street NE,
Washington, DC 20549–1090.
SECURITIES AND EXCHANGE
COMMISSION
All submissions should refer to File
Number SR–CBOE–2020–102. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–CBOE–2020–102 and
should be submitted on or before
November 19, 2020.
[Release No. 34–90262; File No. SR–CBOE–
2020–101]
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–23920 Filed 10–28–20; 8:45 am]
jbell on DSKJLSW7X2PROD with NOTICES
BILLING CODE 8011–01–P
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Renew Its
Nonstandard Expirations Pilot
Program
October 23, 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
13, 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.
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).
17 CFR 200.30–3(a)(12).
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18:03 Oct 28, 2020
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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 September 14, 2010, the Securities
and Exchange Commission (the
‘‘Commission’’) approved a Cboe
Options proposal to establish a pilot
program under which the Exchange is
permitted to list P.M.-settled options on
I. Self-Regulatory Organization’s
broad-based indexes to expire on (a) any
Statement of the Terms of Substance of
Friday of the month, other than the
the Proposed Rule Change
third Friday-of-the-month, and (b) the
last trading day of the month.5 On
Cboe Exchange, Inc. (the ‘‘Exchange’’
January
14, 2016, the Commission
or ‘‘Cboe Options’’) proposes to renew
approved a Cboe Options proposal to
an existing pilot program until May 3,
expand the pilot program to allow P.M.2021. The text of the proposed rule
settled options on broad-based indexes
change is provided below.
to expire on any Wednesday of month,
(additions are italicized; deletions are
other than those that coincide with an
[bracketed])
EOM.6 On August 10, 2016, the
*
*
*
*
*
Commission approved a Cboe Options
Rules of Cboe Exchange, Inc.
proposal to expand the pilot program to
allow P.M.-settled options on broad*
*
*
*
*
based indexes to expire on any Monday
Rule 4.13. Series of Index Options
of month, other than those that coincide
with an EOM.7 Under the terms of the
(a)–(d) No change.
Nonstandard Expirations Pilot Program
(e) Nonstandard Expirations Pilot
(‘‘Program’’), Weekly Expirations and
Program.
EOMs are permitted on any broad-based
(1)–(2) No change.
(3) Duration of Nonstandard
index that is eligible for regular options
Expirations Pilot Program. The
trading. Weekly Expirations and EOMs
Nonstandard Expirations Pilot Program
are cash-settled and have Europeanshall be through [November 2, 2020]May style exercise. The proposal became
3, 2021.
effective on a pilot basis for a period of
fourteen months that commenced on the
*
*
*
*
*
next full month after approval was
The text of the proposed rule change
is also available on the Exchange’s
5 See Securities Exchange Act Release 62911
website (https://www.cboe.com/
(September 14, 2010), 75 FR 57539 (September 21,
AboutCBOE/
2010) (order approving SR–CBOE–2009–075).
CBOELegalRegulatoryHome.aspx), at
6
1 15
17
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
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See Securities Exchange Act Release 76909
(January 14, 2016), 81 FR 3512 (January 21, 2016)
(order approving SR–CBOE–2015–106).
7 See Securities Exchange Act Release 78531
(August 10, 2016), 81 FR 54643 (August 16, 2016)
(order approving SR–CBOE–2016–046).
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]]>Agencies
[Federal Register Volume 85, Number 210 (Thursday, October 29, 2020)]
[Notices]
[Pages 68614-68616]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-23920]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-90267; File No. SR-CBOE-2020-102]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Relating
To Amend Rule 5.1
October 23, 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 14, 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 5.1. The text of the proposed rule change is provided
below.
(additions are italics; deletions are [bracketed])
* * * * *
Cboe Exchange, Inc. Rules
* * * * *
Rule 5.1. Trading Days and Hours
(a) No change.
(b) Regular Trading Hours.
(1) No change.
(2) Index Options. Except as otherwise set forth in the Rules or
under unusual conditions as may be determined by the Exchange, Regular
Trading Hours for transactions in index options are from 9:30 a.m. to
4:15 p.m., except as follows:
(A) Regular Trading Hours for the following index options are from
9:30 a.m. to 4:00 p.m.:
MSCI EAFE Index (EAFE)
MSCI Emerging Markets Index (EM)
* * * * *
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
Currently, pursuant to Rule 5.1(b)(2), MSCI EAFE Index (``EAFE'')
and MSCI Emerging Markets Index (``EM'') options trade on the Exchange
from 9:30 a.m. until 4:15 p.m. Eastern time. The Exchange proposes to
amend Rule 5.1(b)(2)(A) to add EAFE and EM options to the list of index
options that may trade on the Exchange from 9:30 a.m. until 4:00 p.m.
Eastern time.
By way of background, the Exchange currently lists and trades EAFE
and EM options (collectively, ``MSCI Index'' options). The EAFE Index
is designed to captures large and mid-cap representation across 21
developed markets countries (excluding the U.S. and Canada) with 902
constituents, which cover approximately 85% of the free float-adjusted
market capitalization in each country. The EM Index is designed to
capture large and mid-cap representation across emerging market
countries across 26 emerging markets country indexes with 1,388
constituents, which cover approximately 85% of the free float-adjusted
market capitalization in each country. The Exchange understands that
investors trade options on MSCI Indexes often use the prices of the
exchange-traded funds (``ETFs'') derived from the MSCI Indexes (e.g.,
iShares MSCI EAFE and EM ETFs), the components of which are stocks that
are components of the MSCI Indexes, to price options rather than
futures on the MSCI Indexes (which are often used to price index
options, such as options on the S&P 500). The related ETFs end regular
trading at 4:00 p.m. Eastern time each day. Closing trading in the MSCI
Index options at the same time the correlated ETFs end regular trading
\5\ will ensure investors have access to robust pricing of the ETFs,
the underlying stock components of which are stocks that are components
of the MSCI Indexes, they use to price the options, thus will reduce
investors' price risk. Other index options may currently trade from
9:30 a.m. to 4:00 p.m. Eastern time.\6\
---------------------------------------------------------------------------
\5\ While the stocks may continue to trade in an aftermarket
trading session on the listing exchanges, there is less liquidity in
aftermarket trading, which generally leads to wider spreads and more
volatile pricing.
\6\ See Rule 5.1(b)(2)(A), pursuant to which options on the
various S&P Select Sector Indexes may trade. Investors similarly use
pricing of the underlying stocks of the Sector Indexes to price
options and shares of ETFs derived from the Sector Indexes. See also
Securities Exchange Act Release No. 83112 (April 26, 2018), 83 FR
19365 (May 5, 2018) (SR-CBOE-2018-030).
---------------------------------------------------------------------------
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
[[Page 68615]]
Section 6(b) of the Act.\7\ Specifically, the Exchange believes the
proposed rule change is consistent with the Section 6(b)(5) \8\
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) \9\ requirement that the rules of an exchange not be designed
to permit unfair discrimination between customers, issuers, brokers, or
dealers.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ Id.
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In particular, closing trading in the MSCI Index options at the
same time the related ETFs end regular trading will ensure investors
have access to robust pricing of the correlated ETFs (the underlying
stock components of which are also components of the MSCI Indexes) they
use to price the options, which protects investors by reducing their
price risk. Indeed, the Exchange notes that a number of Trading Permit
Holders (``TPHs'') have expressed to the Exchange that aligning the
close of trading in the MSCI Index options would reduce their pricing
risk at the end of the trading day. Additionally, the Exchange believes
lack of ETF pricing may cause Market-Makers to widen their quote
spreads and reduce their quote sizes for the part of the options
trading day during which ETF pricing is not available. The Exchange
believes the proposed rule change will, therefore, help maintain
meaningful liquidity in the MSCI Index options market, which liquidity
may otherwise be impacted if appointed Market-Makers quote during times
when pricing for the related ETFs is unavailable. Also, as noted above,
other index options may trade from 9:30 a.m. to 4:00 p.m. Eastern
time.\10\
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\10\ See supra note 2.
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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 Exchange does not
believe 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 all market participants will be able to
trade MSCI Index options during the same trading hours. Other index
options may currently trade from 9:30 a.m. to 4:00 p.m. Eastern time,
which close at 4:00 p.m. Eastern time to similarly align with the
corresponding underlying stock prices.\11\ 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, and may promote competition, because the proposed
rule change will align the trading hours for options on the MSCI
Indexes with the trading hours of correlated ETFs, which are comprised
of the underlying shares that comprise these indexes. Additionally,
MSCI Index options trade exclusively on Cboe Options. To the extent
that the proposed changes make Cboe Options a more attractive
marketplace for market participants at other exchanges, such market
participants are welcome to become Cboe Options market participant.
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\11\ See supra note 2.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-
4(f)(6) thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \14\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \15\ 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. The
Exchange believes that waiver of the operative delay is consistent with
the protection of investors and the public interest because the
proposed rule change does not raise any novel or unique issues not
previously considered by the Commission. The Exchange notes that the
proposed rule change applies to MSCI Index options trading hours
currently applicable to other index options of which the components
underlying such indexes and the related ETFs stop trading at 4:00 p.m.
Eastern time. Accordingly, the Commission believes that waiver of the
30-day operative delay is consistent with the protection of investors
and the public interest. The Commission hereby waives the operative
delay and designates the proposal as operative upon filing.\16\
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\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6)(iii).
\16\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number
SR-CBOE-2020-102 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange
[[Page 68616]]
Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-CBOE-2020-102. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CBOE-2020-102 and should be submitted on
or before November 19, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-23920 Filed 10-28-20; 8:45 am]
BILLING CODE 8011-01-P
