Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Make Certain Corrections and Other Clarifying Changes to the Rules, 53134-53137 [2021-20654]
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Federal Register / Vol. 86, No. 183 / Friday, September 24, 2021 / Notices
how BX currently mitigates quote
messages.
Further, the Exchange believes that
amending Options 2, Section 10 to
better describe the price at which a
Directed Market Maker must be quoting
to execute against the Directed Order
will bring greater transparency to the
rule. Finally, the Exchange believes that
updating the citations and terminology
within Options 3, Section 27, and
Options 10, Sections 5, 6 and 9 will
clarify its Rulebook.
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because it will allow the Exchange to
immediately implement changes to its
Rulebook that are designed to reflect the
Exchange’s current practice with respect
to quote mitigation. According to the
Exchange, the proposal will not impact
BX’s current quote mitigation practice
and therefore will neither alter the
quantity of quotes the Exchanges
disseminates, nor the manner in which
the Exchange disseminates quote
messages. In addition, the Commission
believes the proposed changes to
Options 2, Section 10, Options 3,
Section 27, and Options 10, Sections 5,
6, and 9 are designed to bring greater
clarity to the Exchange’s Rulebook.
Therefore, the Commission hereby
waives the 30-day operative delay and
designates the proposed rule change as
operative upon filing.27
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:
27 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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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–
BX–2021–041 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–BX–2021–041. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml).
Copies of the submission, all
subsequent amendments, all written
statements with respect to the proposed
rule change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly.
All submissions should refer to File
Number SR–BX–2021–041 and should
be submitted on or before October 15,
2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.28
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–20658 Filed 9–23–21; 8:45 am]
BILLING CODE 8011–01–P
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[Release No. 34–93059; File No. SR–CBOE–
2021–054]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Make Certain
Corrections and Other Clarifying
Changes to the Rules
September 20, 2021.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on
September 16, 2021, Cboe Exchange,
Inc. (the ‘‘Exchange’’ or ‘‘Cboe
Options’’) filed with the Securities and
Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange filed the
proposal as a ‘‘non-controversial’’
proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act 3 and
Rule 19b–4(f)(6) thereunder.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe Exchange, Inc. (the ‘‘Exchange’’
or ‘‘Cboe Options’’) proposes to make
certain corrections and other clarifying
changes to the Rules. 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://www.cboe.com/
AboutCBOE/CBOELegal
RegulatoryHome.aspx), at the
Exchange’s Office of the Secretary, and
at the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 17
17 CFR 200.30–3(a)(12).
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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 proposes to make nonsubstantive changes to its Cboe
53135
Exchange Rulebook (‘‘Rulebook’’) in
order to correct certain errors and make
certain clarifications throughout the
Rules.
The proposed rule change corrects
cross-reference errors in Rules 1.1, 5.5,
5.6, 5.50, 5.51, 5.80 and 5.91 that are
currently inaccurate, as follows:
Rule location of current inaccurate cross-reference
Current cross-reference
5.5 (System Access and Connectivity) paragraph
(b)(2).
5.6 (Order Types, Order Instructions, and Times-inForce) paragraph (c) (definition of ‘‘Compression
or Position Compression Cross (‘‘PCC’’) Order’’).
5.50 (Market-Maker Appointments) paragraph
(h)(1).
5.50 (Market-Maker Appointments) paragraphs (i),
(i)(1), (i)(2) and (i)(3).
5.9 .......................................................
5.10.
5.88 .....................................................
5.85.
Paragraph (g) .....................................
Paragraph (h).
Paragraph (g) and paragraph (h) .......
5.51 (Market-Maker Obligations) paragraph (c) .......
5.80 (Admission to and Conduct on the Trading
Floor) paragraph (c)(1)(C).
5.91 (Floor Broker Responsibilities) paragraph
(d)(2).
8.26 .....................................................
Chapter 3 ............................................
Incorrect cross-references to paragraph (g) should
be paragraph (h) and incorrect cross reference
to paragraph (h) should be paragraph (i).
8.19.
Chapter 13.
8.26 .....................................................
8.19.
The proposed rule change also
corrects paragraph numbering and
lettering in Rules 5.34 and 6.22. Current
Rule 5.34(a)(4) jumps from
subparagraph (C) to (E), Rule 5.34(c)
jumps from subparagraph (10) to (12),
and Rule 6.22 jumps from paragraph (c)
to (e). The proposed rule change
corrects these paragraph formatting
errors by updating Rule 5.34(a)(4)(E) to
(D), Rule 5.34(c)(12) to (11), and Rule
6.22(e) to (d).
The proposed rule change removes
extraneous rule text from Rule 5.81(h).
Specifically, the proposed rule change
removes an extraneous ‘‘or’’ at the end
of the first sentence in that paragraph.
The proposed rule change also amends
Rule 6.5 to remove the term Voluntary
Professional Customer as the Exchange
no longer recognizes the concept of
Voluntary Professional Customers and
no longer uses the term in its Rules.5
Additionally, the proposed rule change
replaces the term ‘‘TPH Department’’
with the term ‘‘Exchange’’ in Rules 3.7,
3.8, 3.10, 3.11, 3.13, 3.15, 3.50, 3.59,
3.60, and 3.61. In 2018, the Exchange
renamed its ‘‘TPH Department’’ to be
called ‘‘Membership Services.’’ The
proposed rule change removes reference
to a ‘‘summary fine under Rule 13.15’’
in Rule 6.1(a)(1), which governs late
transaction reports, as a pattern and
practice of late reporting without
exceptional circumstances may no
longer be subject to a summary fine
5 See Securities Exchange Act Release No. 86173
(June 20, 2019), 84 FR 30267 (June 26, 2019) (SR–
CBOE–2019–027).
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Revised/accurate cross-reference
under 13.15.6 The proposed rule change
seeks to use the term the ‘‘Exchange’’ as
it does throughout the Rulebook when
referring to actions taken by the
Exchange or information that market
participants needs to send to the
Exchange. The Exchange prefers to use
the term ‘‘Exchange’’ rather than
reference a specific department to
permit internal reorganization or
changing of department names without
the need for a rule filing. Pursuant to
Rule 1.5, the Exchange will
communicate to TPHs through notices,
regulatory circulars, or other
communication where to send
information to the Exchange (including
to which department such information
should be directed).
The proposed rule change relocates
Rule 8.43(j) to Rule 8.35(d). The
Exchange previously restructured its
Rulebook in connection with a 2019
technology migration. Prior to
restructuring, the provision currently in
Rule 8.43(j) (former Rule 24A.7(d)),
which specifically governs FLEX
reporting requirements, was a part of
former Rule 24A.7, which governed
FLEX position limits and general
requirements, including reporting.
Former Rule 24A.7 was relocated to
current Rule 8.35.7 Current Rule 8.43
(former Rule 4.13), instead, governs
reports related to non-FLEX position
limits. The provision in Rule 8.43(j)
6 See Securities Exchange Act Release No. 92702
(August 18, 2021), 86 FR 47346 (August 24, 2021)
(SR–CBOE–2021–045).
7 See Securities Exchange Act Release No. 87261
(October 9, 2019), 84 FR 55351 (October 16, 2019)
(SR–CBOE–2019–096).
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(former 24A.7(d)) was not previously
included in the Rule governing reports
related to non-FLEX position limits
(current Rule 8.43/former Rule 4.13) nor
did the Exchange intend for this
provision to become a part of the Rule
governing non-FLEX reports related to
position limits (current Rule 8.43,
former Rule 4.13). However, upon
restructuring its Rulebook and
relocating its Rules related to position
and exercise limits, the Exchange
inadvertently relocated the provision in
regarding FLEX reporting requirements
to Rule 8.43.8 Therefore, the proposed
rule change corrects this inadvertent
relocation by moving the provision in
Rule 8.43(j) back to Rule 8.35 (as Rule
8.35(d)), the appropriate location for
FLEX reporting requirements.9
The proposed rule change also makes
a non-substantive clarification in Rules
5.54, 5.55 and 5.56 in connection with
Designated Primary Market-Makers
(‘‘DPMs’’), Lead Market-Makers
(‘‘LMMs’’), and Primary Market-Makers
(‘‘PMMs’’) continuous quoting
requirements, respectively. Specifically,
the Exchange proposes to add clarity to
these Rules by making the definition of
continuous electronic quoting explicit
in each. All Market Makers, including
DPMs, PMMs, and LMMs, are required
to provide continuous electronic quotes
by submitting continuous bids and
offers for 90% of the time during
Regular Trading Hours. The definition
8 See
id.
light of the proposed rule change to relocate
Rule 8.43(j) to Rule 8.35(d), the proposed rule
change also updates cross-references within this
provision.
9 In
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of continuous quoting requirements is
explicit in Rule 5.52(d)(2), which
provides for a 90% timing requirement
for a Market-Maker’s continuous
electronic quotes.10 The proposed rule
change merely proposes to make the
same requirement explicit, thus
providing additional clarity in the Rules
governing electronic quoting
requirements for DPMs, LMMs and
PMMs. This is the continuous electronic
quoting requirement to which DPMs,
LMM and PMMs are currently subject.
Finally, the proposed rule change also
makes a non-substantive clarification in
Rule 1.1 under the definition of
Capacity. The definition of ‘‘L’’ Capacity
code provides that it is for the account
of a non-Trading Permit Holder affiliate.
The Exchange notes that the ‘‘L’’
Capacity code is specifically defined in
and for the purposes described in the
Cboe Options Fees Schedule. Therefore,
the proposed rule change adds language
to the definition of ‘‘L’’ Capacity code to
make this explicit, thereby providing
additional clarity in the Rule.
(a) Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.11 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 12 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) 13 requirement that
the rules of an exchange not be designed
10 The Exchange notes that the 90% timing
requirement for a Market-Maker applies while the
Market-Maker is ‘‘required to provide electronic
quotes in an appointed option class on a given
trading day’’ as provided in Rule 5.52(d)(2), while
the 90% timing requirement for a DPM, LMM and
PMM applies ‘‘during Regular Trading Hours’’, as
provided in Rules 5.54(a)(1), 5.55(a)(1), and 5.56(a),
respectively.
11 15 U.S.C. 78f(b).
12 15 U.S.C. 78f(b)(5).
13 Id.
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to permit unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, the Exchange believes
the proposed rule change will remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, will protect investors and the
public interest by correcting errors and
inaccuracies and clarifying text within
the Rules. Specifically, by correcting
inaccurate cross-references, errors in
certain Rule text and in Rule numbering
and lettering, updating a defined term,
relocating an inadvertently moved Rule
to its original and appropriate location
and adding clarifying language
regarding the timing requirement for
continuous quoting requirements,
which is the same for all MarketMakers,14 in the Rules governing
quoting requirements for DPMs, LMMs,
PMMs, as well as clarifying language in
regarding the application of the L
Capacity code (i.e., for purposes of the
Fees Schedule), the proposed rule
change is designed to protect investors
by making the Rulebook more accurate
and adding clarity to the Rules, thereby
mitigating any potential investor
confusion. The proposed rule change
will have no impact on trading on the
Exchange, as all the proposed rule
changes are nonsubstantive in nature.
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 not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed rule change is not intended as
a competitive filing, but rather simply
updates the Rules to correct certain
errors and add clarity. The proposed
rule change makes no substantive
changes to the Rules, and thus will have
no impact on trading on the Exchange.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposal.
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
14 See
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supra note 6.
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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
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 17 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 18
permits the Commission to designate a
shorter time if such action is consistent
with the protection of investors and the
public interest. The Exchange has asked
the Commission to waive the 30-day
operative delay. The Exchange notes
that the proposed rule change will have
no impact on trading on the Exchange,
as it does not make any substantive
changes to the Rules. Rather, the
proposal corrects minor errors and
makes non-substantive clarifications to
mitigate any potential investor
confusion. The Commission believes
that waiver of the 30-day operative
delay is consistent with the protection
of investors and the public interest
because the proposed rule change is
non-substantive in nature as it corrects
outdated or incorrect cross references
and paragraph numbering, relocates
some text, and makes non-substantive
clarifications to add clarity to avoid any
potential for confusion. Therefore, the
Commission hereby waives the
operative delay and designates the
proposal as operative upon filing.19
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
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 17 CFR 240.19b–4(f)(6).
18 17 CFR 240.19b–4(f)(6)(iii).
19 For purposes only of waiving the 30-day
operative delay, the Commission also has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
16 17
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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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–20654 Filed 9–23–21; 8:45 am]
Electronic Comments
BILLING CODE 8011–01–P
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CBOE–2021–054 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–CBOE–2021–054. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–CBOE–2021–054 and
should be submitted on or before
October 15, 2021.
DEPARTMENT OF STATE
[Public Notice: 11547]
Defense Trade Advisory Group; Notice
of Open Meeting
The Defense Trade Advisory Group
(DTAG) will meet in open session from
1:00 p.m. until 5:00 p.m. on Thursday,
November 4, 2021. Based on federal and
state guidance in response to the Covid19 pandemic, the meeting will be held
virtually. The virtual forum will open at
12:00 p.m. The membership of this
advisory committee consists of private
sector defense trade representatives,
appointed by the Assistant Secretary of
State for Political-Military Affairs, who
advise the Department on policies,
regulations, and technical issues
affecting defense trade. The DTAG was
established as an advisory committee
under the authority of 22 U.S.C. 2651a
and 2656 and the Federal Advisory
Committee Act, 5 U.S.C. app. The
purpose of the meeting will be to
discuss current defense trade issues and
topics for further study. The following
agenda topics will be discussed and
final reports presented: (1) Advise on
best practices for conducting internal
audits to evaluate ITAR compliance
programs, and (2) provide sources for
recordkeeping and reporting
requirements for all licenses,
agreements, and exemptions, as well as
industry perceptions of the return on
investment of said requirements, plus
any recommendations for improvement.
The meeting will be held virtually via
WebEx. There will be one WebEx
invitation for each attendee, and only
the invited attendee should use the
invitation. Please let us know if you
need any of the following
accommodations: Live captions, digital/
text versions of webinar materials, or
other (please specify).
Members of the public may attend
this virtual session and may submit
questions by email following the formal
DTAG presentation. Members of the
public may also submit a brief statement
(less than three pages) to the committee
in writing for inclusion in the public
minutes of the meeting. Each member of
the public that wishes to attend this
20 17
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53137
session must provide: Name and contact
information, including an email address
and phone number, and any request for
reasonable accommodation to the DTAG
Designated Federal Officer (DFO),
Deputy Assistant Secretary Michael
Miller, via email at DTAG@state.gov by
COB Tuesday, November 2, 2021.
FOR FURTHER INFORMATION CONTACT: Ms.
Barbara Eisenbeiss, PM/DDTC, SA–1,
12th Floor, Directorate of Defense Trade
Controls, Bureau of Political-Military
Affairs, U.S. Department of State,
Washington, DC 20522–0112; telephone
(202) 663–2835 or email DTAG@
state.gov.
Michael F. Miller,
Designated Federal Officer, Defense Trade
Advisory Group, U.S. Department of State.
[FR Doc. 2021–20739 Filed 9–23–21; 8:45 am]
BILLING CODE 4710–25–P
DEPARTMENT OF STATE
[Public Notice: 11540]
Imposition of Additional Sanctions on
Russia Under the Chemical and
Biological Weapons Control and
Warfare Elimination Act of 1991;
Correction
ACTION:
Notice.
The Department of State
published a document in the Federal
Register of September 7, 2021,
concerning sanctions and waivers under
the Chemical and Biological Weapons
Control and Warfare Elimination Act of
1991. One of the sanctions measures
included an incorrect citation to the
U.S. Munitions Import List.
FOR FURTHER INFORMATION CONTACT:
Pamela K. Durham, Office of Missile,
Biological, and Chemical
Nonproliferation, Bureau of
International Security and
Nonproliferation, Department of State,
Telephone (202) 647–4930.
SUPPLEMENTARY INFORMATION:
SUMMARY:
Correction:
In the Federal Register of September
7, 2021, in FR Doc. 2021–19117 on page
50204, in the first column, amend the
‘‘Import Restrictions’’ paragraph to
correct the U.S. Munitions Import List
citation to read ‘‘27 CFR 447.21’’, as
follows:
4. Import Restrictions: New or
pending permit applications submitted
to the Department of Justice, Bureau of
Alcohol, Tobacco, Firearms and
Explosives (ATF) for the permanent
importation into the United States of
firearms or ammunition, as defined on
the U.S. Munitions Import List (27 CFR
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[Federal Register Volume 86, Number 183 (Friday, September 24, 2021)]
[Notices]
[Pages 53134-53137]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-20654]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93059; File No. SR-CBOE-2021-054]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Make
Certain Corrections and Other Clarifying Changes to the Rules
September 20, 2021.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on September 16, 2021, Cboe Exchange, Inc. (the ``Exchange'' or
``Cboe Options'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I
and II below, which Items have been prepared by the Exchange. The
Exchange filed the proposal as a ``non-controversial'' proposed rule
change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule
19b-4(f)(6) thereunder.\4\ The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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\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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to make certain corrections and other clarifying changes to the Rules.
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://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set
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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 proposes to make non-substantive changes to its Cboe
Exchange Rulebook (``Rulebook'') in order to correct certain errors and
make certain clarifications throughout the Rules.
The proposed rule change corrects cross-reference errors in Rules
1.1, 5.5, 5.6, 5.50, 5.51, 5.80 and 5.91 that are currently inaccurate,
as follows:
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Rule location of current Current cross- Revised/accurate
inaccurate cross-reference reference cross-reference
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5.5 (System Access and 5.9.............. 5.10.
Connectivity) paragraph
(b)(2).
5.6 (Order Types, Order 5.88............. 5.85.
Instructions, and Times-in-
Force) paragraph (c)
(definition of ``Compression
or Position Compression Cross
(``PCC'') Order'').
5.50 (Market-Maker Paragraph (g).... Paragraph (h).
Appointments) paragraph
(h)(1).
5.50 (Market-Maker Paragraph (g) and Incorrect cross-
Appointments) paragraphs (i), paragraph (h). references to
(i)(1), (i)(2) and (i)(3). paragraph (g) should
be paragraph (h) and
incorrect cross
reference to
paragraph (h) should
be paragraph (i).
5.51 (Market-Maker 8.26............. 8.19.
Obligations) paragraph (c).
5.80 (Admission to and Conduct Chapter 3........ Chapter 13.
on the Trading Floor)
paragraph (c)(1)(C).
5.91 (Floor Broker 8.26............. 8.19.
Responsibilities) paragraph
(d)(2).
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The proposed rule change also corrects paragraph numbering and
lettering in Rules 5.34 and 6.22. Current Rule 5.34(a)(4) jumps from
subparagraph (C) to (E), Rule 5.34(c) jumps from subparagraph (10) to
(12), and Rule 6.22 jumps from paragraph (c) to (e). The proposed rule
change corrects these paragraph formatting errors by updating Rule
5.34(a)(4)(E) to (D), Rule 5.34(c)(12) to (11), and Rule 6.22(e) to
(d).
The proposed rule change removes extraneous rule text from Rule
5.81(h). Specifically, the proposed rule change removes an extraneous
``or'' at the end of the first sentence in that paragraph. The proposed
rule change also amends Rule 6.5 to remove the term Voluntary
Professional Customer as the Exchange no longer recognizes the concept
of Voluntary Professional Customers and no longer uses the term in its
Rules.\5\ Additionally, the proposed rule change replaces the term
``TPH Department'' with the term ``Exchange'' in Rules 3.7, 3.8, 3.10,
3.11, 3.13, 3.15, 3.50, 3.59, 3.60, and 3.61. In 2018, the Exchange
renamed its ``TPH Department'' to be called ``Membership Services.''
The proposed rule change removes reference to a ``summary fine under
Rule 13.15'' in Rule 6.1(a)(1), which governs late transaction reports,
as a pattern and practice of late reporting without exceptional
circumstances may no longer be subject to a summary fine under
13.15.\6\ The proposed rule change seeks to use the term the
``Exchange'' as it does throughout the Rulebook when referring to
actions taken by the Exchange or information that market participants
needs to send to the Exchange. The Exchange prefers to use the term
``Exchange'' rather than reference a specific department to permit
internal reorganization or changing of department names without the
need for a rule filing. Pursuant to Rule 1.5, the Exchange will
communicate to TPHs through notices, regulatory circulars, or other
communication where to send information to the Exchange (including to
which department such information should be directed).
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\5\ See Securities Exchange Act Release No. 86173 (June 20,
2019), 84 FR 30267 (June 26, 2019) (SR-CBOE-2019-027).
\6\ See Securities Exchange Act Release No. 92702 (August 18,
2021), 86 FR 47346 (August 24, 2021) (SR-CBOE-2021-045).
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The proposed rule change relocates Rule 8.43(j) to Rule 8.35(d).
The Exchange previously restructured its Rulebook in connection with a
2019 technology migration. Prior to restructuring, the provision
currently in Rule 8.43(j) (former Rule 24A.7(d)), which specifically
governs FLEX reporting requirements, was a part of former Rule 24A.7,
which governed FLEX position limits and general requirements, including
reporting. Former Rule 24A.7 was relocated to current Rule 8.35.\7\
Current Rule 8.43 (former Rule 4.13), instead, governs reports related
to non-FLEX position limits. The provision in Rule 8.43(j) (former
24A.7(d)) was not previously included in the Rule governing reports
related to non-FLEX position limits (current Rule 8.43/former Rule
4.13) nor did the Exchange intend for this provision to become a part
of the Rule governing non-FLEX reports related to position limits
(current Rule 8.43, former Rule 4.13). However, upon restructuring its
Rulebook and relocating its Rules related to position and exercise
limits, the Exchange inadvertently relocated the provision in regarding
FLEX reporting requirements to Rule 8.43.\8\ Therefore, the proposed
rule change corrects this inadvertent relocation by moving the
provision in Rule 8.43(j) back to Rule 8.35 (as Rule 8.35(d)), the
appropriate location for FLEX reporting requirements.\9\
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\7\ See Securities Exchange Act Release No. 87261 (October 9,
2019), 84 FR 55351 (October 16, 2019) (SR-CBOE-2019-096).
\8\ See id.
\9\ In light of the proposed rule change to relocate Rule
8.43(j) to Rule 8.35(d), the proposed rule change also updates
cross-references within this provision.
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The proposed rule change also makes a non-substantive clarification
in Rules 5.54, 5.55 and 5.56 in connection with Designated Primary
Market-Makers (``DPMs''), Lead Market-Makers (``LMMs''), and Primary
Market-Makers (``PMMs'') continuous quoting requirements, respectively.
Specifically, the Exchange proposes to add clarity to these Rules by
making the definition of continuous electronic quoting explicit in
each. All Market Makers, including DPMs, PMMs, and LMMs, are required
to provide continuous electronic quotes by submitting continuous bids
and offers for 90% of the time during Regular Trading Hours. The
definition
[[Page 53136]]
of continuous quoting requirements is explicit in Rule 5.52(d)(2),
which provides for a 90% timing requirement for a Market-Maker's
continuous electronic quotes.\10\ The proposed rule change merely
proposes to make the same requirement explicit, thus providing
additional clarity in the Rules governing electronic quoting
requirements for DPMs, LMMs and PMMs. This is the continuous electronic
quoting requirement to which DPMs, LMM and PMMs are currently subject.
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\10\ The Exchange notes that the 90% timing requirement for a
Market-Maker applies while the Market-Maker is ``required to provide
electronic quotes in an appointed option class on a given trading
day'' as provided in Rule 5.52(d)(2), while the 90% timing
requirement for a DPM, LMM and PMM applies ``during Regular Trading
Hours'', as provided in Rules 5.54(a)(1), 5.55(a)(1), and 5.56(a),
respectively.
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Finally, the proposed rule change also makes a non-substantive
clarification in Rule 1.1 under the definition of Capacity. The
definition of ``L'' Capacity code provides that it is for the account
of a non-Trading Permit Holder affiliate. The Exchange notes that the
``L'' Capacity code is specifically defined in and for the purposes
described in the Cboe Options Fees Schedule. Therefore, the proposed
rule change adds language to the definition of ``L'' Capacity code to
make this explicit, thereby providing additional clarity in the Rule.
(a) Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\11\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \12\ 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) \13\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
\13\ Id.
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In particular, the Exchange believes the proposed rule change will
remove impediments to and perfect the mechanism of a free and open
market and a national market system, and, in general, will protect
investors and the public interest by correcting errors and inaccuracies
and clarifying text within the Rules. Specifically, by correcting
inaccurate cross-references, errors in certain Rule text and in Rule
numbering and lettering, updating a defined term, relocating an
inadvertently moved Rule to its original and appropriate location and
adding clarifying language regarding the timing requirement for
continuous quoting requirements, which is the same for all Market-
Makers,\14\ in the Rules governing quoting requirements for DPMs, LMMs,
PMMs, as well as clarifying language in regarding the application of
the L Capacity code (i.e., for purposes of the Fees Schedule), the
proposed rule change is designed to protect investors by making the
Rulebook more accurate and adding clarity to the Rules, thereby
mitigating any potential investor confusion. The proposed rule change
will have no impact on trading on the Exchange, as all the proposed
rule changes are nonsubstantive in nature.
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\14\ See supra note 6.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposed rule change is not
intended as a competitive filing, but rather simply updates the Rules
to correct certain errors and add clarity. The proposed rule change
makes no substantive changes to the Rules, and thus will have no impact
on trading on the Exchange.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposal.
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\
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\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.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \17\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \18\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has asked the Commission to waive the 30-day operative delay. The
Exchange notes that the proposed rule change will have no impact on
trading on the Exchange, as it does not make any substantive changes to
the Rules. Rather, the proposal corrects minor errors and makes non-
substantive clarifications to mitigate any potential investor
confusion. The Commission believes that waiver of the 30-day operative
delay is consistent with the protection of investors and the public
interest because the proposed rule change is non-substantive in nature
as it corrects outdated or incorrect cross references and paragraph
numbering, relocates some text, and makes non-substantive
clarifications to add clarity to avoid any potential for confusion.
Therefore, the Commission hereby waives the operative delay and
designates the proposal as operative upon filing.\19\
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\17\ 17 CFR 240.19b-4(f)(6).
\18\ 17 CFR 240.19b-4(f)(6)(iii).
\19\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
[[Page 53137]]
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-CBOE-2021-054 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-CBOE-2021-054. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are cautioned that we do not redact or
edit personal identifying information from comment submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-CBOE-2021-054
and should be submitted on or before October 15, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-20654 Filed 9-23-21; 8:45 am]
BILLING CODE 8011-01-P
