Self-Regulatory Organizations; Cboe C2 Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Eliminate Existing Rule 3.30 (Qualification and Registration) and Incorporate by Reference Cboe Exchange, Inc. Chapter 3, Section B, in Its Entirety, 20564-20567 [2021-08038]
Download as PDF
<![CDATA[
20564
Federal Register / Vol. 86, No. 74 / Tuesday, April 20, 2021 / Notices
pilot programs. Thus, the proposed rule
change will help to ensure consistency
across market centers without
implicating any competitive issues.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to 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 17 and Rule 19b–
4(f)(6) thereunder.18
A proposed rule change filed under
Rule 19b–4(f)(6) 19 normally does not
become operative prior to 30 days after
the date of the filing. However, Rule
19b–4(f)(6)(iii) 20 permits the
Commission to designate a shorter time
if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposed
rule change may become operative
immediately upon filing. 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
current clearly erroneous execution
pilot program to continue
uninterrupted, without any changes,
while the Exchange and the other
national securities exchanges consider a
permanent proposal for clearly
erroneous execution reviews. For this
reason, the Commission hereby waives
the 30-day operative delay and
designates the proposed rule change as
operative upon filing.21
17 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
19 17 CFR 240.19b–4(f)(6).
20 17 CFR 240.19b–4(f)(6)(iii).
21 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
18 17
VerDate Sep<11>2014
17:10 Apr 19, 2021
Jkt 253001
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–
NYSEArca–2021–22 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–NYSEArca–2021–22. 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
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
PO 00000
Frm 00089
Fmt 4703
Sfmt 4703
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NYSEArca–2021–22 and
should be submitted on or before May
11, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–08032 Filed 4–19–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91560; File No. SR–C2–
2021–006]
Self-Regulatory Organizations; Cboe
C2 Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Eliminate Existing
Rule 3.30 (Qualification and
Registration) and Incorporate by
Reference Cboe Exchange, Inc.
Chapter 3, Section B, in Its Entirety
April 14, 2021.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’ or ‘‘Exchange Act’’),1 and Rule
19b–4 thereunder,2 notice is hereby
given that on April 9, 2021, Cboe C2
Exchange, Inc. (the ‘‘Exchange’’ or ‘‘C2’’)
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 substantially 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
The Exchange proposes to eliminate
existing Rule 3.30 and incorporate by
reference Cboe Exchange, Inc. (‘‘Cboe
Options’’) Chapter 3, Section B, in its
22 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
1 15
E:\FR\FM\20APN1.SGM
20APN1
Federal Register / Vol. 86, No. 74 / Tuesday, April 20, 2021 / Notices
entirety. 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/
options/regulation/rule_filings/ctwo/),
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 Exchange previously adopted C2
Rule 3.30 (Qualification and
Registration), which provides for
registration requirements to ensure that
associated persons of Trading Permit
Holder (‘‘TPH’’) organizations attain and
maintain specified levels of competence
and knowledge pertinent to their
functions. In general, the current rules:
(1) Require that persons engaged in a
TPH organization’s securities business
who are to function as representatives or
principals register with the Exchange in
the category of registration appropriate
to their functions by passing one or
more qualification examinations 5 and
(2) exempt specified associated persons
from the registration requirements.6 The
Exchange believes that current C2 Rule
3.30 is substantively identical to
corresponding Rule 3.30 on its affiliate
exchange, Cboe Options.7 The Exchange
notes that, other than Cboe Options Rule
3.30, the C2 rulebook incorporates by
reference the remaining rules contained
in Cboe Options Chapter 3, Section B,
as such rules may be in effect from time
to time.8 However, the Exchange’s
5 See
C2 Options Rule 3.30(a)(1).
C2 Options Rule 3.30(a)(2).
7 See Cboe Options Rule 3.30 (Qualification and
Registration of Trading Permit Holders and
Associated Persons).
8 See Exchange Act Release No. 91203 (February
24, 2021), 86 FR 12251 (March 2, 2021). As a
condition of the exemption approved by the
Commission pursuant to Section 36 of the Act, the
6 See
VerDate Sep<11>2014
17:10 Apr 19, 2021
Jkt 253001
20565
B title is regulatory in nature.11 The
Exchange believes incorporating by
reference the entire Cboe Options
Chapter 3, Section B rules maintains
consistency between C2 and Cboe
Options rules, and helps ensure
identical regulation of the Exchange’s
TPHs that are also Cboe Options TPHs
and also ensures that C2-only TPHs are
subject to consistent regulation as Cboe
Options TPHs.
rulebook is clear that Cboe Options Rule
3.30, which is contained in Cboe
Options Chapter 3, Section B, does not
apply to C2.
The Exchange no longer wishes to
maintain an exception of Cboe Options
Rule 3.30 to the incorporation by
reference of Chapter 3, Section B as it
does not believe it is necessary and may
cause potential confusion. Additionally,
Cboe Options has filed a proposed rule
change to amend its registration rules,
including Cboe Options Rule 3.30. The
pending rule filing also proposes to
adopt new rules under Cboe Options
Chapter 3, Section B, related to
registration requirements.9 As most of
Cboe Options Chapter 3, Section B is
incorporated by reference into the
Exchange’s rulebook, the proposed new
Cboe Options rules (and amendments to
existing Cboe Options rules contained
in Chapter 3, Section B other than Cboe
Options Rule 3.30) would automatically
apply to C2 upon that rule filing
becoming operative. Since the Exchange
does not incorporate by reference Cboe
Options Rule 3.30 however, the
proposed amendments to Cboe Options
Rule 3.30 would not automatically
apply to C2, even though Cboe Options
Rule 3.30, as amended, would relate to,
and even cross-reference, the proposed
new Cboe Options rules that would
apply to C2.10 As such, the Exchange
now proposes to eliminate the language
that states Cboe Options Rule 3.30 does
not apply to C2 and remove C2 Rule
3.30, which is identical to Cboe Options
Rule 3.30, thereby incorporating by
reference Cboe Options Rule 3.30
(which becomes incorporated by
reference under the umbrella of the
overall incorporation by reference of
Cboe Options Chapter 3, Section B). The
Exchange believes Cboe Options Rule
3.30 is within the same category of
exchange rules otherwise incorporated
into C2 Chapter 3, Section B by
reference to Cboe Options Chapter 3,
Section B (i.e. rules related to TPH
Registration). Further, the incorporation
by reference of Cboe Options Rule 3.30
into the Exchange’s Chapter 3, Section
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with 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.
Additionally, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 14 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, the proposed rule
change does not make any substantive
change to any of C2’s rules. The
proposed rule change is merely
intended to incorporate by reference the
entirety of Cboe Options Chapter 3,
Section B rules in the C2 rulebook,
instead of excluding a single Cboe
Options Rule from incorporation (i.e.,
Cboe Options Rule 3.30) which
currently is substantively identical to
the corresponding C2 Rule (i.e., C2 Rule
3.30). Indeed, the proposed rule change
makes no substantive changes to the C2
rulebook: It does not alter any of the
Exchange agreed to provide written notice to its
members whenever Cboe Option proposes a change
to its Chapter 3, Section B rules. The Exchange
provides such notice via a posting on the same
website location where the Exchange posts its own
rule filings pursuant to Rule 19b–4 within the
timeframe required by such rule. Such notice alerts
Exchange members to the proposed Cboe Options
rule change and gives them an opportunity to
comment on the proposal. The Exchange similarly
informs its members in writing when the
Commission approves any such proposed change.
9 See SR–CBOE–2021–022.
10 Id.
11 Cboe Options Chapter 3, Section B rules are
categories of rules that are not trading rules. See 17
CFR 200.30–3(a)(76) (contemplating such requests).
In addition, several other Self-Regulatory
Organizations (‘‘SROs’’) incorporate by reference
similar regulatory rules of other SROs. See, e.g.,
Exchange Act Release Nos. 57478 (March 12, 2008),
73 FR 14521 (March 18, 2008), 53128 (January 13,
2006), 71 FR 3550 (January 23, 2006); 49260
(February 17, 2004), 69 FR 8500 (February 24,
2004).
12 15 U.S.C. 78f(b).
13 15 U.S.C. 78f(b)(5).
14 Id.
PO 00000
Frm 00090
Fmt 4703
Sfmt 4703
E:\FR\FM\20APN1.SGM
20APN1
20566
Federal Register / Vol. 86, No. 74 / Tuesday, April 20, 2021 / Notices
current rules incorporated by reference,
and it incorporates by reference a rule
(i.e., Cboe Options 3.30), which is
substantively identical to an existing
rule (i.e., C2 Rule 3.30), which would be
removed. As such, the same rules
currently applicable to C2 TPHs
effectively will apply to TPHs upon
effectiveness of this rule filing in the
same manner, whether those rules are
incorporated by reference to Cboe
Options rules or included in C2’s rules.
The Exchange also believes the
proposed rule change is designed to
promote just and equitable principles of
trade, removes impediments to and
perfects the mechanism of a free and
open market and a national market
system, and, in general protects
investors and the public interest, by
consolidating all of its rules related to
TPH registration into a single rule set.
Incorporating by reference Cboe Options
Rule 3.30 into the Exchange’s Chapter 3,
Section B title will provide an easy
reference for Exchange TPHs seeking to
comply with registration and
qualification requirements of both Cboe
Options and C2. The Exchange believes
the proposed change makes the
Exchange’s rulebook easier to read and
follow, thus allowing market
participants to better understand the
rules of the Exchange, which will also
result in less burdensome and more
efficient regulatory compliance for
market participants that are TPHs of
both Cboe Options and C2. Also, as
discussed, TPHs will be required to
continue to comply with the substance
of Cboe Options Rule 3.30, since the
substance of Cboe Options Rule 3.30 is
substantively identical.
Lastly, the Exchange believes that in
light of the proposed rule changes to
corresponding Cboe Options rules
discussed above, incorporating by
reference Cboe Options Rule 3.30 will
promote efficient use of the
Commission’s and the Exchange’s
resources by avoiding duplicative rule
filings that would otherwise be needed
based on simultaneous changes to
identical rule text sought by more than
one SRO (i.e., Cboe Options and C2).
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. Particularly,
the proposal is not intended to address
any competitive issue. Rather, the
Exchange is effectively incorporating by
reference a Cboe Options rule (i.e., Cboe
Options Rule 3.30) to replace a current
substantively identical Exchange rule
VerDate Sep<11>2014
17:10 Apr 19, 2021
Jkt 253001
(i.e., C2 Rule 3.30) that is within the
same category of exchange rules
otherwise incorporated into C2 Chapter
3, Section B by reference (i.e., Cboe
Options Chapter 3, Section B, which
contains rules related to TPH
Registration). The Exchange is not
amending the substance of its
registration rules with this proposed
rule change and therefore no TPH is
impacted.
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 written 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 15 and Rule 19b–
4(f)(6) thereunder.16
The Exchange requested that the
Commission waive the 30-day operative
delay period after which a proposed
rule change under Rule 19b–4(f)(6)
becomes effective so that the Exchange
can immediately update its rulebook to
further align with the Cboe Options
rulebook. This further alignment of
rulebooks will help avoid any potential
confusion that may be created by, as
discussed above, all Cboe Options rules
in Chapter 3, Section B currently being
incorporated by reference in the C2
rulebook with the exception of Cboe
Options Rule 3.30. Additionally, and as
also discussed above, Cboe Options has
filed a separate proposed rule change to
amend certain registration rules,
including Cboe Options Rule 3.30.17 As
a result, waiving the 30-day operative
delay period for this proposed rule
change will allow the separate proposed
rule changes to amend the Cboe Options
rulebook to automatically apply to the
C2 rulebook. This, in turn, will not only
15 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
17 See SR–CBOE–2021–022.
16 17
PO 00000
Frm 00091
Fmt 4703
Sfmt 4703
maintain consistency between the C2
and Cboe Options rulebooks, but it will
also avoid the need for duplicative
proposed rule change filings by two
separate, but related, SROs that are
based on simultaneous changes to
otherwise identical rule text. For these
reasons, the Commission believes that
waiver of the 30-day operative delay for
this proposal is consistent with the
protection of investors and the public
interest. Accordingly, the Commission
hereby waives the 30-day operative
delay and designates the proposal
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
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–
C2–2021–006 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–C2–2021–006. 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
18 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule change’s impact on efficiency,
competition, and capital formation. See 15 U.S.C.
78c(f).
E:\FR\FM\20APN1.SGM
20APN1
Federal Register / Vol. 86, No. 74 / Tuesday, April 20, 2021 / Notices
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 such
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–C2–2021–006 and should
be submitted on or before May 11, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–08038 Filed 4–19–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91554; File No. SR–
CboeEDGX–2021–019]
Self-Regulatory Organizations; Cboe
EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Extend the
Current Pilot Program Related to EDGX
Rule 11.15, Clearly Erroneous
Executions, to the Close of Business
on October 20, 2021
April 14, 2021.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on April 5,
2021, Cboe EDGX Exchange, Inc.
(‘‘Exchange’’ or ‘‘EDGX’’) filed with the
Securities and Exchange Commission
(‘‘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 EDGX Exchange, Inc. (‘‘EDGX’’
or the ‘‘Exchange’’) is filing with the
Securities and Exchange Commission
(the ‘‘Commission’’) a proposed rule
change to extend the current pilot
program related to EDGX Rule 11.15,
Clearly Erroneous Executions, to the
close of business on October 20, 2021.
The text of the proposed rule change is
provided in Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
options/regulation/rule_filings/edgx/),
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 purpose of this filing is to extend
the effectiveness of the Exchange’s
current rule applicable to Clearly
Erroneous Executions to the close of
business on October 20, 2021. Portions
of Rule 11.15, explained in further
detail below, are currently operating as
a pilot program set to expire on April
20, 2021.5
On September 10, 2010, the
Commission approved, on a pilot basis,
changes to EDGX Rule 11.15 that,
among other things: (i) Provided for
uniform treatment of clearly
3 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
5 See Securities Exchange Act Release No. 90233
(October 20, 2020), 85 FR 67787 (October 26, 2020)
(SR–CboeEDGX–2020–051).
4 17
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Sep<11>2014
17:10 Apr 19, 2021
Jkt 253001
PO 00000
Frm 00092
Fmt 4703
Sfmt 4703
20567
erroneous execution reviews in multistock events involving twenty or more
securities; and (ii) reduced the ability of
the Exchange to deviate from the
objective standards set forth in the rule.6
In 2013, the Exchange adopted a
provision designed to address the
operation of the Plan.7 Finally, in 2014,
the Exchange adopted two additional
provisions providing that: (i) A series of
transactions in a particular security on
one or more trading days may be viewed
as one event if all such transactions
were effected based on the same
fundamentally incorrect or grossly
misinterpreted issuance information
resulting in a severe valuation error for
all such transactions; and (ii) in the
event of any disruption or malfunction
in the operation of the electronic
communications and trading facilities of
an Exchange, another SRO, or
responsible single plan processor in
connection with the transmittal or
receipt of a trading halt, an Officer,
acting on his or her own motion, shall
nullify any transaction that occurs after
a trading halt has been declared by the
primary listing market for a security and
before such trading halt has officially
ended according to the primary listing
market.8
On December 26, 2018, the
Commission published the proposed
Eighteenth Amendment 9 to the Plan to
Address Extraordinary Market Volatility
Pursuant to Rule 608 of Regulation NMS
under the Act (the ‘‘Limit Up-Limit
Down Plan’’ or the ‘‘Plan’’) 10 to allow
the Plan to operate on a permanent,
rather than pilot, basis. On April 8,
2019, the Exchange amended EDGX
Rule 11.15 to untie the pilot program’s
effectiveness from that of the Plan and
to extend the pilot’s effectiveness to the
close of business on October 18, 2019 in
order allow the Exchange and other
national securities exchanges additional
time to consider further amendments, if
any, to the clearly erroneous execution
rules in light of the proposed Eighteenth
Amendment to the Plan.11 On April 17,
6 See Securities Exchange Act Release No. 62886
(September 10, 2010), 75 FR 56613 (September 16,
2010) (SR–EDGX–2010–03).
7 See Securities Exchange Act Release No. 68814
(February 1, 2013), 78 FR 9086 (February 7, 2013)
(SR–EDGX–2013–06).
8 See Securities Exchange Act Release No. 72434
(June 19, 2014), 79 FR 36110 (June 25, 2014) (SR–
EDGX–2014–12).
9 See Securities Exchange Act Release No. 84843
(December 18, 2018), 83 FR 66464 (December 26,
2018) (File No. 4–631) (‘‘Eighteenth Amendment’’).
10 See Securities Exchange Act Release No. 67091
(May 31, 2012), 77 FR 33498 (June 6, 2012) (the
‘‘Limit Up-Limit Down Release’’).
11 See Securities Exchange Act Release No. 87364
(April 10, 2019), 84 FR 15652 (April 16, 2019) (SR–
CboeEDGX–2019–018).
E:\FR\FM\20APN1.SGM
20APN1
]]>Agencies
[Federal Register Volume 86, Number 74 (Tuesday, April 20, 2021)]
[Notices]
[Pages 20564-20567]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-08038]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-91560; File No. SR-C2-2021-006]
Self-Regulatory Organizations; Cboe C2 Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Eliminate Existing Rule 3.30 (Qualification and Registration) and
Incorporate by Reference Cboe Exchange, Inc. Chapter 3, Section B, in
Its Entirety
April 14, 2021.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'' or ``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\
notice is hereby given that on April 9, 2021, Cboe C2 Exchange, Inc.
(the ``Exchange'' or ``C2'') 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 substantially 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
The Exchange proposes to eliminate existing Rule 3.30 and
incorporate by reference Cboe Exchange, Inc. (``Cboe Options'') Chapter
3, Section B, in its
[[Page 20565]]
entirety. 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/options/regulation/rule_filings/ctwo/), 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 Exchange previously adopted C2 Rule 3.30 (Qualification and
Registration), which provides for registration requirements to ensure
that associated persons of Trading Permit Holder (``TPH'')
organizations attain and maintain specified levels of competence and
knowledge pertinent to their functions. In general, the current rules:
(1) Require that persons engaged in a TPH organization's securities
business who are to function as representatives or principals register
with the Exchange in the category of registration appropriate to their
functions by passing one or more qualification examinations \5\ and (2)
exempt specified associated persons from the registration
requirements.\6\ The Exchange believes that current C2 Rule 3.30 is
substantively identical to corresponding Rule 3.30 on its affiliate
exchange, Cboe Options.\7\ The Exchange notes that, other than Cboe
Options Rule 3.30, the C2 rulebook incorporates by reference the
remaining rules contained in Cboe Options Chapter 3, Section B, as such
rules may be in effect from time to time.\8\ However, the Exchange's
rulebook is clear that Cboe Options Rule 3.30, which is contained in
Cboe Options Chapter 3, Section B, does not apply to C2.
---------------------------------------------------------------------------
\5\ See C2 Options Rule 3.30(a)(1).
\6\ See C2 Options Rule 3.30(a)(2).
\7\ See Cboe Options Rule 3.30 (Qualification and Registration
of Trading Permit Holders and Associated Persons).
\8\ See Exchange Act Release No. 91203 (February 24, 2021), 86
FR 12251 (March 2, 2021). As a condition of the exemption approved
by the Commission pursuant to Section 36 of the Act, the Exchange
agreed to provide written notice to its members whenever Cboe Option
proposes a change to its Chapter 3, Section B rules. The Exchange
provides such notice via a posting on the same website location
where the Exchange posts its own rule filings pursuant to Rule 19b-4
within the timeframe required by such rule. Such notice alerts
Exchange members to the proposed Cboe Options rule change and gives
them an opportunity to comment on the proposal. The Exchange
similarly informs its members in writing when the Commission
approves any such proposed change.
---------------------------------------------------------------------------
The Exchange no longer wishes to maintain an exception of Cboe
Options Rule 3.30 to the incorporation by reference of Chapter 3,
Section B as it does not believe it is necessary and may cause
potential confusion. Additionally, Cboe Options has filed a proposed
rule change to amend its registration rules, including Cboe Options
Rule 3.30. The pending rule filing also proposes to adopt new rules
under Cboe Options Chapter 3, Section B, related to registration
requirements.\9\ As most of Cboe Options Chapter 3, Section B is
incorporated by reference into the Exchange's rulebook, the proposed
new Cboe Options rules (and amendments to existing Cboe Options rules
contained in Chapter 3, Section B other than Cboe Options Rule 3.30)
would automatically apply to C2 upon that rule filing becoming
operative. Since the Exchange does not incorporate by reference Cboe
Options Rule 3.30 however, the proposed amendments to Cboe Options Rule
3.30 would not automatically apply to C2, even though Cboe Options Rule
3.30, as amended, would relate to, and even cross-reference, the
proposed new Cboe Options rules that would apply to C2.\10\ As such,
the Exchange now proposes to eliminate the language that states Cboe
Options Rule 3.30 does not apply to C2 and remove C2 Rule 3.30, which
is identical to Cboe Options Rule 3.30, thereby incorporating by
reference Cboe Options Rule 3.30 (which becomes incorporated by
reference under the umbrella of the overall incorporation by reference
of Cboe Options Chapter 3, Section B). The Exchange believes Cboe
Options Rule 3.30 is within the same category of exchange rules
otherwise incorporated into C2 Chapter 3, Section B by reference to
Cboe Options Chapter 3, Section B (i.e. rules related to TPH
Registration). Further, the incorporation by reference of Cboe Options
Rule 3.30 into the Exchange's Chapter 3, Section B title is regulatory
in nature.\11\ The Exchange believes incorporating by reference the
entire Cboe Options Chapter 3, Section B rules maintains consistency
between C2 and Cboe Options rules, and helps ensure identical
regulation of the Exchange's TPHs that are also Cboe Options TPHs and
also ensures that C2-only TPHs are subject to consistent regulation as
Cboe Options TPHs.
---------------------------------------------------------------------------
\9\ See SR-CBOE-2021-022.
\10\ Id.
\11\ Cboe Options Chapter 3, Section B rules are categories of
rules that are not trading rules. See 17 CFR 200.30-3(a)(76)
(contemplating such requests). In addition, several other Self-
Regulatory Organizations (``SROs'') incorporate by reference similar
regulatory rules of other SROs. See, e.g., Exchange Act Release Nos.
57478 (March 12, 2008), 73 FR 14521 (March 18, 2008), 53128 (January
13, 2006), 71 FR 3550 (January 23, 2006); 49260 (February 17, 2004),
69 FR 8500 (February 24, 2004).
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
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.
Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \14\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
\14\ Id.
---------------------------------------------------------------------------
In particular, the proposed rule change does not make any
substantive change to any of C2's rules. The proposed rule change is
merely intended to incorporate by reference the entirety of Cboe
Options Chapter 3, Section B rules in the C2 rulebook, instead of
excluding a single Cboe Options Rule from incorporation (i.e., Cboe
Options Rule 3.30) which currently is substantively identical to the
corresponding C2 Rule (i.e., C2 Rule 3.30). Indeed, the proposed rule
change makes no substantive changes to the C2 rulebook: It does not
alter any of the
[[Page 20566]]
current rules incorporated by reference, and it incorporates by
reference a rule (i.e., Cboe Options 3.30), which is substantively
identical to an existing rule (i.e., C2 Rule 3.30), which would be
removed. As such, the same rules currently applicable to C2 TPHs
effectively will apply to TPHs upon effectiveness of this rule filing
in the same manner, whether those rules are incorporated by reference
to Cboe Options rules or included in C2's rules.
The Exchange also believes the proposed rule change is designed to
promote just and equitable principles of trade, removes impediments to
and perfects the mechanism of a free and open market and a national
market system, and, in general protects investors and the public
interest, by consolidating all of its rules related to TPH registration
into a single rule set. Incorporating by reference Cboe Options Rule
3.30 into the Exchange's Chapter 3, Section B title will provide an
easy reference for Exchange TPHs seeking to comply with registration
and qualification requirements of both Cboe Options and C2. The
Exchange believes the proposed change makes the Exchange's rulebook
easier to read and follow, thus allowing market participants to better
understand the rules of the Exchange, which will also result in less
burdensome and more efficient regulatory compliance for market
participants that are TPHs of both Cboe Options and C2. Also, as
discussed, TPHs will be required to continue to comply with the
substance of Cboe Options Rule 3.30, since the substance of Cboe
Options Rule 3.30 is substantively identical.
Lastly, the Exchange believes that in light of the proposed rule
changes to corresponding Cboe Options rules discussed above,
incorporating by reference Cboe Options Rule 3.30 will promote
efficient use of the Commission's and the Exchange's resources by
avoiding duplicative rule filings that would otherwise be needed based
on simultaneous changes to identical rule text sought by more than one
SRO (i.e., Cboe Options and C2).
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. Particularly, the proposal
is not intended to address any competitive issue. Rather, the Exchange
is effectively incorporating by reference a Cboe Options rule (i.e.,
Cboe Options Rule 3.30) to replace a current substantively identical
Exchange rule (i.e., C2 Rule 3.30) that is within the same category of
exchange rules otherwise incorporated into C2 Chapter 3, Section B by
reference (i.e., Cboe Options Chapter 3, Section B, which contains
rules related to TPH Registration). The Exchange is not amending the
substance of its registration rules with this proposed rule change and
therefore no TPH is impacted.
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 written 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 \15\ and Rule 19b-
4(f)(6) thereunder.\16\
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 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.
---------------------------------------------------------------------------
The Exchange requested that the Commission waive the 30-day
operative delay period after which a proposed rule change under Rule
19b-4(f)(6) becomes effective so that the Exchange can immediately
update its rulebook to further align with the Cboe Options rulebook.
This further alignment of rulebooks will help avoid any potential
confusion that may be created by, as discussed above, all Cboe Options
rules in Chapter 3, Section B currently being incorporated by reference
in the C2 rulebook with the exception of Cboe Options Rule 3.30.
Additionally, and as also discussed above, Cboe Options has filed a
separate proposed rule change to amend certain registration rules,
including Cboe Options Rule 3.30.\17\ As a result, waiving the 30-day
operative delay period for this proposed rule change will allow the
separate proposed rule changes to amend the Cboe Options rulebook to
automatically apply to the C2 rulebook. This, in turn, will not only
maintain consistency between the C2 and Cboe Options rulebooks, but it
will also avoid the need for duplicative proposed rule change filings
by two separate, but related, SROs that are based on simultaneous
changes to otherwise identical rule text. For these reasons, the
Commission believes that waiver of the 30-day operative delay for this
proposal is consistent with the protection of investors and the public
interest. Accordingly, the Commission hereby waives the 30-day
operative delay and designates the proposal operative upon filing.\18\
---------------------------------------------------------------------------
\17\ See SR-CBOE-2021-022.
\18\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule change'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 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-C2-2021-006 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-C2-2021-006. 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
[[Page 20567]]
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
such 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-C2-2021-006
and should be submitted on or before May 11, 2021.
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. 2021-08038 Filed 4-19-21; 8:45 am]
BILLING CODE 8011-01-P
