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 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 (http://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 (http://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 (http://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 (http://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 (http://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 (http://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 (http://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 (http://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 (http://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