Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Length of Its Current Global Trading Hours Session, 59824-59833 [2021-23436]
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Federal Register / Vol. 86, No. 206 / Thursday, October 28, 2021 / Notices
(i) The relevant security-based swap is
an ‘‘OTC derivative’’ or ‘‘OTC derivative
contract,’’ as defined in EMIR article
2(7), that has not been cleared by a
central counterparty and otherwise is
subject to the provisions of EMIR article
11, EMIR RTS articles 11–15, and EMIR
Margin RTS article 2; or
(ii) The relevant security-based swap
has been cleared by a central
counterparty that is authorized or
recognized to clear derivatives contracts
by a relevant authority in the EU.
It is hereby further determined and
ordered pursuant to rule 3a71–6 under
the Exchange Act, that the paragraph
(f)(1)(i)(M)(2) of the French Substituted
Compliance Order is amended and
replaced with the following:
(2) With respect to the portion of
Exchange Act rule 18a–5(a)(17) and
(b)(13) that relates to one or more
provisions of Exchange Act rule 15Fh–
3 for which substituted compliance is
available under this Order, the Covered
Entity applies substituted compliance
for such business conduct standard(s) of
Exchange Act rule 15Fh–3 pursuant to
this Order, as applicable, with respect to
the relevant security-based swap or
activity; and
It is hereby further determined and
ordered pursuant to rule 3a71–6 under
the Exchange Act, that the paragraph
(f)(2)(i)(K)(2) of the French Substituted
Compliance Order is amended and
replaced with the following:
(2) With respect to the portion of
Exchange Act rule 18a–6(b)(1)(xii) or
(b)(2)(vii) that relates to one or more
provisions of Exchange Act rule 15Fh–
3 for which substituted compliance is
available under this Order, the Covered
Entity applies substituted compliance
for such business conduct standard(s) of
Exchange Act rule 15Fh–3 pursuant to
this Order, as applicable, with respect to
the relevant security-based swap or
activity; and
It is hereby further determined and
ordered pursuant to rule 3a71–6 under
the Exchange Act, that the paragraph
(a)(13) of the UK Substituted
Compliance Order is amended and
replaced with the following:
(13) Covered Entity’s counterparties
as UK EMIR ‘‘counterparties.’’ For each
condition in paragraphs (b) through (f)
of this Order that requires the
application of, and the Covered Entity’s
compliance with, provisions of UK
EMIR, UK EMIR RTS, UK EMIR Margin
RTS, and/or other UK requirements
adopted pursuant to those provisions, if
the relevant provision applies only to
the Covered Entity’s activities with
specified types of counterparties, and if
the counterparty to the Covered Entity
is not any of the specified types of
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counterparty, the Covered Entity
complies with the applicable condition
of this Order:
(i) As if the counterparty were the
specified type of counterparty; in this
regard, if the Covered Entity reasonably
determines that the counterparty would
be a financial counterparty if it were
established in the UK and authorized by
an appropriate UK authority, it must
treat the counterparty as if the
counterparty were a financial
counterparty;
(ii) Without regard to the application
of UK EMIR article 13; and
(iii) Only to the extent that an
Exchange Act section or rule cited in
paragraphs (b) through (f) of this Order
applies to the security-based swap
activities with that counterparty.
It is hereby further determined and
ordered pursuant to rule 3a71–6 under
the Exchange Act, that a security-based
swap dealer applying substituted
compliance with respect to the capital
requirements of Exchange Act section
15F(e) and Exchange Act rules 18a–1,
and 18a–1a through d has until January
1, 2022 to meet (as applicable):
a. The additional capital condition in
paragraph (c)(1)(iii) of the Amended and
Restated Order Granting Conditional
Substituted Compliance in Connection
with Certain Requirements Applicable
to Non-U.S. Security-Based Swap
Dealers and Major Security-Based Swap
Participants Subject to Regulation in the
Federal Republic of Germany (Exchange
Act Release No. 35–93411) (‘‘German
Amended Order’’);
b. The additional capital condition in
paragraph (c)(1)(iii) of the French
Substituted Compliance Order; or
c. The additional capital condition in
paragraph (c)(1)(iii) of the UK
Substituted Compliance Order.
It is hereby further determined and
ordered pursuant to rule 3a71–6 under
the Exchange Act, that a security-based
swap dealer applying substituted
compliance with respect to the margin
requirements of Exchange Act section
15F(e) and Exchange Act rule 18a–3 has
until January 1, 2022 to meet (as
applicable):
a. The additional margin conditions
in paragraphs (c)(1)(ii) and (iii) of the
German Amended Order;
b. The additional margin conditions
in paragraphs (c)(1)(ii) and (iii) of the
French Substituted Compliance Order;
or
c. The additional margin conditions
in paragraphs (c)(1)(ii) and (iii) of the
UK Substituted Compliance Order.
It is further determined and ordered
that the compliance date for Exchange
Act section 15F(e) and Exchange Act
rules 18a–1, and 18a–1a through d is
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January 1, 2022 for a security-based
swap dealer with a principal place of
business in Germany that is operating
pursuant to a waiver under CRR, Article
7 (Derogation from the application of
prudential requirements on an
individual basis).
By the Commission.
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2021–23445 Filed 10–27–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93403; File No. SR–CBOE–
2021–061]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Extend the Length of
Its Current Global Trading Hours
Session
October 22, 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 October
21, 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, II, and III 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 extend
the length of its current global trading
hours session (‘‘Global Trading Hours’’
or ‘‘GTH’’). 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.
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
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Federal Register / Vol. 86, No. 206 / Thursday, October 28, 2021 / Notices
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 the
Statutory Basis for, the Proposed Rule
Change
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1. Purpose
The Exchange proposes to extend the
hours of its GTH session. The proposed
rule change to extend the current GTH
session aims to meet growing customer
demand globally for expanded access to
trade SPX and VIX options, which are
designed to help enable investors to
hedge or gain exposure to the broad U.S.
market and global equity volatility.
By way of background, the Exchange
currently offers two trading sessions.5
Regular Trading Hours (‘‘RTH’’) and
GTH. Rule 5.1 currently sets forth the
trading hours for the Exchange’s RTH
and GTH trading sessions. Particularly,
RTH for transactions in equity options
(including options on individual stocks,
ETFs, ETNs, and other securities) are
the normal business days and hours set
forth in the rules of the primary market
currently trading the securities
underlying the options, except for
options on ETFs, ETNs, Index Portfolio
Shares, Index Portfolio Receipts, and
Trust Issued Receipts the Exchange
designates to remain open for trading
beyond 4:00 p.m.6 but in no case later
than 4:15 p.m.7 RTH for transactions in
index options are from 9:30 a.m. to 4:15
p.m., subject to certain exceptions.8 The
GTH session currently begins at 3:00
a.m. and goes until 9:15 a.m. on Monday
through Friday.9 The Exchange’s rules
provide that the Exchange may
5 The term ‘‘trading session’’ means the hours
during which the Exchange is open for trading for
Regular Trading Hours or Global Trading Hours
(each of which may referred to as a trading session).
Unless otherwise specified in the Rules or the
context otherwise indicates, all Rules apply in the
same manner during each trading session. See Rule
1.1 (Definitions).
6 All times referenced herein are Eastern Standard
Time.
7 See Rule 5.1(b)(1).
8 See Rule 5.1(b)(2).
9 See Rule 5.1(c).
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designate as eligible for trading during
GTH any exclusively listed index option
designated for trading under Chapter 4,
Section B.10 Currently, SPX, VIX and
XSP are approved for trading during
GTH.11
The Exchange notes that it originally
adopted the GTH trading session due to
global demand from investors to trade
SPX and VIX options, as alternatives for
hedging and other investment purposes,
particularly as a complementary
investment tool to VIX futures.12 Given
that SPX and VIX options only traded
during regular trading hours prior to the
adoption of the GTH session, it was
historically difficult for U.S. investors
that traded in non-U.S. markets to use
these products as part of their global
investment strategies. Accordingly, the
Exchange adopted the GTH session to
meet that demand and allow market
participants to engage in trading these
options (SPX and VIX) in conjunction
with trading VIX futures on Cboe
Futures Exchange, LLC (‘‘CFE’’) during
extended hours.13 Currently, VIX
futures are open for trading on CFE
nearly 23 hours a day, 5 days a week.14
The proposed rule change to extend
the GTH trading session aims to provide
global market participants with
expanded access to trade the products
offered during GTH. Indeed, the
proposal to lengthen the current GTH
session is designed to help meet
growing investor demand for the ability
to manage risk more efficiently, react to
global macroeconomic events as they
are happening and adjust SPX and VIX
options positions nearly around the
clock. Additionally, the Exchange notes
the proposed expanded hours overlap
with the Asia Pacific markets, thereby
offering a new segment of global market
participants the opportunity to trade
GTH products in their local time.
Specifically, the Exchange proposes to
expand the session by starting the GTH
session at 8:15 p.m. on the immediately
preceding calendar day, rather than at
10 The Exchange notes that Rule 5.1(c)(1)
inadvertently refers to the wrong section of Chapter
4. Particularly, Rule 5.1(c)(1) references Chapter 4,
Section D, which section governs Corporate Debt
Security Options, instead of the intended reference
of Chapter 4, Section B, which section governs
Index Options. The Exchange proposes to correct
that inadvertent cross-reference error now.
11 If the Exchange designates a class of index
options as eligible for trading during GTH, FLEX
Options with the same underlying index are also
deemed eligible for trading during GTH. The
Exchange also notes that although eligible, XSP is
not currently listed for trading during GTH.
12 See Securities Exchange Act Release No. 34–
73017 (September 8, 2014), 79 FR 54758 (September
12, 2014) (SR–CBOE–2014–062).
13 Id.
14 See CFE Rule 1202(b).
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the current start time of 3:00 a.m.15 The
GTH session would continue to end at
9:15 a.m. Transactions effected during
the GTH session will have the same
trade date as the RTH session that
immediately follows it.16 The proposed
rule change otherwise makes no changes
to the trading rules applicable to GTH.
The GTH trading session will continue
to be a separate trading session from
RTH and the rules that currently apply
(or don’t apply) to the current GTH
session will continue to apply (or not
apply) to the lengthened GTH session.17
The Exchange will continue to use the
same servers and hardware during the
lengthened GTH session as it uses for
RTH and GTH today. Further, Trading
Permit Holders (‘‘TPHs’’) may continue
to use the same ports and connections
to the Exchange for both trading
sessions. The Book used during the
lengthened GTH session will also be the
same Book used currently during RTH
and GTH. The Exchange proposes to
amend and conform various rules to
relating to the proposed expanded GTH,
as described more fully below.
Trading Days and Hours
As noted above, Rule 5.1 (Trading
Days and Hours) currently sets forth the
trading hours for RTH and GTH. The
Exchange proposes to amend Rule 5.1 in
connection with its proposal to lengthen
the GTH session. Particularly, the
Exchange proposes to amend Rule
5.1(c), which sets forth the trading hours
for the GTH session, to provide that
except under unusual conditions as may
be determined by the Exchange, GTH
hours are from 8:15 p.m. (previous day)
to 9:15 a.m. on Monday through Friday
(instead of 3:00 a.m. to 9:15 a.m.
Monday through Friday). The Exchange
also proposes to add language providing
that the hours for the GTH session that
15 For example, the GTH trading session for
Mondays currently begins on Mondays at 3:00 a.m.
Pursuant to the proposed rule change, a Monday
GTH trading session will commence on the
immediately preceding Sunday at 8:15 p.m.
16 Transactions effected between 8:15 p.m. to
11:59 p.m. would be considered to have the trade
date of the following business day. For example,
any transactions effected during the GTH session
that begins at 8:15 p.m. on Tuesday, November 23
will be considered to have the trade date of
Wednesday, November 24 regardless of whether the
trades were effected between 8:15 p.m. and 11:59
p.m. on Tuesday, November 23 or between 12:00
a.m. and 9:15 a.m. on Wednesday November 24.
17 For example, business conduct rules in Chapter
8 and rules related to doing business with the
public in Chapter 9 will continue to apply during
the GTH session. Additionally, a broker-dealer’s
due diligence and best execution obligations apply
during the GTH trading session. As there will still
be no open outcry trading on the floor during the
GTH trading, Chapter 5, Section G will continue not
to apply as such rules pertain to manual order
handling and open-outcry trading.
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follows any holiday listed under Rule
5.1(d) 18 will be from 12:00 a.m. (the
calendar day immediately following the
day the holiday is observed) until 9:15
a.m., unless the holiday is observed on
a Friday, in which case, GTH hours for
the subsequent GTH session will start at
8:15 p.m. on the Sunday following the
holiday (observed) until 9:15 a.m.19 The
Exchange proposes to start the GTH
session that follows a holiday (other
than holidays observed on Fridays) at
12:00 a.m. on the trading day
immediately following the holiday
(observed) because current Rule 5.1(d)
provides the Exchange is not open for
business on those holidays. The
proposed rule change therefore ensures
the proposed extended GTH session
remains consistent with the current
language of Rule 5.1(d) (i.e., the
Exchange remains closed for business
on holidays).
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Index Values
The Exchange next proposes to amend
Rule 5.1(c)(3) which currently provides
that while it may not be calculated and
disseminated at all times during GTH,
current values of the VIX Index (i.e.,
intraday/spot values of the VIX Index)
will be widely disseminated at least
once every 15 seconds by OPRA or one
or more major market vendors during
that trading session. Rule 5.1(c)(3) also
provides no current index value
underlying any other index option
trading during GTH is disseminated
during or at the close of that trading
session.
Pursuant to Rules 4.10(f) and (g), to
list options on a broad-based index
(currently, the only options that trade
during GTH overlying broad-based
indexes), current indexes values must
be widely disseminated at least once
every 15 seconds. The initial purpose of
having a rule provision regarding the
potential lack of dissemination of index
values during GTH was to supersede
those requirements with respect to GTH,
as index reporting authorities may not
disseminate updated values outside of
regular trading hours. Moreover, the
Exchange notes authority to decide
when and how frequently to calculate
18 Rule 5.1(d) provides that the Exchange is not
open for business on the following holidays: New
Year’s Day, Martin Luther King, Jr. Day, Presidents’
Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day, and Christmas
Day.
19 For example, the GTH session that follows
Thanksgiving (observed this year on November 25,
2021), will begin at 12:00 a.m. on Friday, November
26, 2021 and end at 9:15 a.m. Because Christmas
in 2021 will be observed on a Friday, the GTH
session that follows the observed holiday on Friday,
December 24, 2021, will start at 8:15 p.m. on
Sunday, December 26, 2021 and end at 9:15 a.m.
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and disseminate index values lies solely
with a reporting authority. Currently,
S&P Dow Jones Indices LLC (‘‘S&P’’)
does not disseminate current values of
the S&P 500 Index during GTH, whereas
Cboe Global Indices, LLC (‘‘CGI’’) 20
currently does disseminate current
values of the VIX Index for most (but
not all) 21 of the GTH session. While CGI
plans to continue its current
dissemination of VIX Index values
during the current GTH hours (i.e.,
between 3:00 a.m. to 9:15 a.m.), it does
not intend to calculate or disseminate
current values of the VIX Index during
the proposed additional GTH hours (i.e.,
from 8:15 p.m. to 3:00 a.m.). The
proposed rule change therefore amends
Rule 5.1(c)(3) to reflect this change and
clarify that current values of VIX will be
widely disseminated at least once every
fifteen (15) seconds by the Options Price
Reporting Authority or one or more
major market vendors during that
trading session only between 3:00 a.m.
to 9:15 a.m. and further provide that
between 8:15 p.m. to 3:00 a.m. the
Exchange will not report a value of an
index underlying an index option
trading during GTH, because the value
of the underlying indexes of index
options trading during GTH (i.e., SPX
and VIX) will not be recalculated during
this time.
The Exchange notes that since the
inception of the Exchange’s GTH trading
session in 2014, the Exchange has
disclosed the possibility that index
values on options listed for trading
during that session may not be
disseminated. Particularly, VIX is
intended to represent the market’s
expectation of S&P 500 volatility over
the next 30 days. The accuracy of the
calculation for VIX indicative (or spot)
values depends on the quality of bid
and offer quotes for constituent SPX
options series. As the proposed
additional GTH hours has yet to be
implemented, CGI cannot currently
know that the SPX option quotes
20 CGI is an affiliate of the Exchange and is the
reporting authority for the Cboe Volatility Index
(the ‘‘VIX Index’’) (which underlies VIX options the
Exchange currently lists for trading) and the Cboe
Short-Term Volatility Index (‘‘VIX9D) (which
underlies VXST options the Exchange is authorized
to, but does not, list for trading).
21 There may be times when a current value is not
available, such as if CGI (as reporting authority)
does not begin making current index values
available until after a certain amount of time
(approximately 15 minutes) has passed following
the open of the current GTH session (for example,
to ensure sufficient quotes in series used to
calculate the index values) or if there are technical
issues preventing CGI (as reporting authority) from
calculating index values. During the times the
current value of VIX is not available (and thus not
disseminated) during current GTH, VIX options will
continue to be listed for trading during that trading
session.
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displayed during those hours will be
sufficient to calculate accurate and
meaningful VIX indicative values in the
same manner it does during RTH or the
current GTH session. Indeed, the
Exchange expects that initially there
will be overall lower levels of trading
during the proposed additional GTH
hours (8:15 p.m. to 3:00 a.m.) as
compared to both RTH and the current
GTH session. Therefore, CGI has
determined to not calculate VIX spot
values during the proposed additional
GTH hours. After the launch of
extended GTH, to the extent CGI as
index calculator determines that SPX
quotes during such additional hours
will support accurate VIX indicative
values, CGI will reconsider whether to
calculate and disseminate these values
during the entirety of GTH (and the
Exchange would submit rule filings to
amend the rules, as necessary). The
Exchange notes that it similarly did not
report a value of an index underlying an
index option trading during GTH when
the GTH session was first adopted.22
Additionally, pursuant to Rule 9.20, any
TPH that accepts orders for customers
for execution during GTH must disclose
to those customers various risks related
to trading during that trading session,
including the risk that an updated
underlying index or portfolio value or
intraday indicative value will not be
calculated or publicly disseminated
during GTH. Further, the closing value
of the index from the previous trading
day will still be available for TPHs that
trade during GTH. The proposed change
to Rule 5.1(c)(3) also has no impact on
trading during GTH. The Exchange
lastly notes that the proposed change is
also consistent with the rules of its
affiliated exchanges that have a GTH
session.23
Definitions
The Exchange proposes to amend the
definition of ‘‘Business Day’’ and
‘‘Trading Day’’ under Rule 1.1
(Definitions) in connection with the
proposed expansion of the GTH trading
session. The terms ‘‘business day’’ and
‘‘trading day’’ currently mean a day on
22 See Securities Exchange Act Release No. 34–
73704 (November 28, 2014), 79 FR 72044
(December 4, 2014) (SR–CBOE–2014–062) (order
granting accelerated approval of proposed rule
change, as modified by Amendments Nos 1 and 2,
to adopt Extended Trading Hours for SPX and VIX).
Particularly, the Exchange proposed to adopt Rule
6.1A(k), which provided ‘‘[t]he Exchange will not
report a value of an index underlying an index
option trading during Extended Trading Hours,
because the value of the underlying index will not
be recalculated during or at the close of Extended
Trading Hours.’’
23 See Cboe C2 Exchange, Inc. (‘‘C2’’) Rule
5.1(c)(3) and Cboe EDGX Exchange, Inc. (‘‘Cboe
EDGX’’) Rule 21.2(c)(3).
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Federal Register / Vol. 86, No. 206 / Thursday, October 28, 2021 / Notices
which the Exchange is open for trading
during RTH. The definition currently
provides that a business day or trading
day includes both trading sessions on
that day. As the expanded GTH session
will now begin on a calendar day
different than the business day (or
trading day), the Exchange proposes to
eliminate this language and adopt
clarifying language that instead provides
that a business day or trading day
includes the RTH session and the GTH
session that immediately precedes it.
Also, because the expanded GTH
session will begin on the same calendar
day as an RTH session, the Exchange
proposes to eliminate the following
language from this definition to avoid
potential confusion: ‘‘[I]if the Exchange
is not open for Regular Trading Hours
on a day, then it will not be open for
Global Trading Hours on that day.’’ In
its place, the Exchange proposes to
clarify that if the Exchange is not open
for Regular Trading Hours on a day,
then it will not be open for a Global
Trading Hours session immediately
preceding what would have otherwise
been the Regular Trading Hours session
on that day. The Exchange believes the
proposed amendments to the definition
to add clarity and alleviate potential
confusion.
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Entry of Orders, Quotes and
Cancellations
The Exchange proposes to amend
Rule 5.7 (Entry of Orders and Quotes),
which currently provides that Users can
enter orders and quotes into the System,
or cancel previously entered orders and
quotes, from 2:00 a.m. until RTH market
close, subject to certain requirements
and conditions. The Exchange first
notes that Rule 5.7 inadvertently omits
to differentiate the start time for the
entry of orders, quotes and cancellations
for All Sessions 24 classes and RTH
classes.25 The start time for RTH Classes
is currently 7:30 a.m., which is reflected
accurately in Rule 5.31(b). The
Exchange therefore proposes to update
Rule 5.7 to make clear that Users can
enter orders and quotes, or cancel
previously entered orders and quotes,
from 7:30 a.m. until RTH market close
for RTH Classes. In light of the proposal
to start the GTH session at 8:15 p.m.
(instead of 3:00 a.m.), the Exchange
proposes to update the time that Users
can begin entering orders and quotes
24 The term ‘‘All Sessions class’’ means an
options class the Exchange lists for trading during
both GTH and RTH, which currently is only SPX
and VIX. As noted above, although eligible, XSP is
not currently listed for trading during GTH.
25 The term ‘‘RTH class’’ means an options class
the Exchange lists for trading during RTH only
(currently all classes other than SPX and VIX).
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into the System (or canceling previously
entered orders and quotes) for All
Sessions Classes from its current start
time of 2:00 a.m. to 8:00 p.m. on the
previous day. While Users will have less
time to submit orders quotes and
cancellations prior to the GTH opening,
the Exchange believes having 15
minutes, as proposed, to submit orders,
quotes and cancellations in All Sessions
Classes prior to the GTH opening will to
be an adequate and sufficient amount of
time, especially given that the Exchange
lists only two classes for trading during
GTH.
Opening Auction Process
The Exchange proposes to amend
Rule 5.31 (Opening Auction Process),
which rule governs opening auctions
during RTH and GTH. First, the
Exchange proposes to update Rule
5.31(b) which sets forth the time the
Queuing Period begins. The Queuing
Period refers to the time period prior to
the initiation of an opening rotation
during which the System accepts orders
and quotes in the Queuing Book 26 for
participation in the open rotation for the
applicable session. Rule 5.31(b)
currently provides that the Queuing
Period begins at 2:00 a.m. for All
Sessions Classes and at 7:30 a.m. for
RTH Only Classes. The Exchange
proposes to update the Rule 5.31(b) to
provide that the Queuing Period for All
Sessions Classes will begin at 8:00 p.m.
(the previous day). The Exchange
believes the proposed Queuing Period
still provides a sufficient amount of
time for TPHs to enter quotes and orders
into the Queuing Book for participation
in the GTH opening rotation, especially
given that the Exchange lists only two
classes for trading during GTH.
Next, the Exchange proposes to
amend Rule 5.31(c), which currently
states that beginning at 2:00 a.m. for the
GTH trading session and at 8:30 a.m. for
the RTH trading session, and until the
conclusion of the opening rotation for a
series, the Exchange disseminates
opening auction updates for the series.27
26 The term ‘‘Queuing Book’’ means the book into
which Users may submit orders and quotes (and
onto which GTC and GTD orders remaining on the
Book from the previous trading session or trading
day, as applicable, are entered) during the Queuing
Period for participation in the applicable opening
rotation. Orders and quotes on the Queuing Book
may not execute until the opening rotation. The
Queuing Book for the GTH opening auction process
may be referred to as the ‘‘GTH Queuing Book,’’ and
the Queuing Book for the RTH opening auction
process may be referred to as the ‘‘RTH Queuing
Book.’’ See Rule 5.31(a).
27 The Exchange disseminates updates every five
seconds, unless there are no updates to the opening
information since the previously disseminated
update, in which case the Exchange disseminates
updates every minute, to all subscribers to the
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The Exchange proposes to update Rule
5.31(c) to provide that opening auction
updates will be disseminated beginning
at 8:00 p.m. (the previous day) for GTH.
The Exchange also proposes to amend
Rule 5.31(d), which describes the events
that will trigger the opening rotation for
a class during RTH and GTH. Currently
Rule 5.31(d) (2) provides that for the
Global Trading Hours session, the
System initiates the opening rotation at
3:00 a.m. The Exchange proposes to
update Rule 5.31(d)(2), to reflect the
new opening rotation time of 8:15 p.m.
(the previous day).
The Exchange finally proposes to
amend Rule 5.33 (Complex Orders).
Particularly, the Exchange proposes to
amend Rule 5.33(c), which describes the
COB Opening Process, which occurs at
the beginning of each trading session
and after a trading halt. The System
accepts complex orders for inclusion in
the COB Opening Process at the times
and in the manner set forth in Rules 5.7
and 5.31(b), except the Queuing Period
for complex orders ends when the
complex strategy opens. Complex orders
entered during the Queuing Period are
not eligible for execution until the
initiation of the COB Opening Process.
Rule 5.33(c)(1) currently states that the
Exchange will disseminate indicative
prices and order imbalance information
based on complex orders queued in the
System for the COB Opening Process
beginning at (A) 2:00 a.m. for All
Sessions classes for the GTH trading
session and (B) 8:30 a.m. for RTH Only
classes and 9:15 a.m. for All Sessions
classes for the RTH trading session, and
updated every five seconds thereafter
until the initiation of the COB Opening
Process. This functionality provides
users with information regarding the
expected COB opening, which the
Exchange believes may contribute
additional transparency and price
discovery to the COB Opening Process.
The Exchange proposes to amend Rule
5.33(c)(1) to reflect that in light of the
proposed extended GTH session,
indicative prices and order imbalance
information will be disseminated
beginning at 8:00 p.m. the previous day
(instead of 2:00 a.m.) for All Sessions
classes for the GTH trading session.
Market-Maker Rules
Current Rule 5.50(b) (Market-Maker
Appointments) provides that a MarketMaker may enter an appointment
request via an Exchange-approved
electronic interface with the Exchange’s
systems by 2:30 a.m. for All Sessions,
which appointment becomes effective
Exchange’s data feeds that deliver these messages
until a series opens. See Rule 5.31(c).
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on the open of the GTH trading session,
or by 9:00 a.m. for RTH Only classes,
which appointment becomes effective
on the open of the RTH session. In light
of the proposed change to the start time
of the GTH session, the Exchange
proposes to update the time by which
Market-Makers may enter an
appointment request for All Sessions
classes that would become effective at
the open of the subsequent GTH trading
session. Particularly, the Exchange
proposes to update the cutoff time to
submit a request for an All Sessions
class appointment for the GTH session
(currently only SPX and VIX) from 2:30
a.m. to 5:30 p.m. the previous day,
which is the earliest time the Exchange
may ‘‘restart’’ the System to prepare for
GTH, and clarify that such appointment
would be effective upon the open of the
GTH session (i.e., starting at 8:15 p.m.).
The Exchange notes that it intends to
additionally continue to maintain an
additional cutoff time of 1:30 a.m. for
All Sessions appointment classes.
Particularly, any appointment request
submitted after 5:30 p.m. and at or prior
to 1:30 a.m. would be effective starting
at 2:30 a.m. Providing for an additional
appointment request cutoff time would
provide Market-Makers, including
Market-Makers who may only trade
during the current GTH hours between
3:00 a.m. and 9:15 a.m., an additional
opportunity to submit a request for a
VIX or SPX appointment and be able to
quote the remainder of the GTH session.
The Exchange also notes that MarketMakers do not often update
appointment selections with respect to
SPX and VIX and therefore believes any
changes to the appointment cutoff
time(s) will have a de minimis impact.
Lastly, the Exchange proposes to clarify
that the current 9:00 a.m. cutoff for class
appointments to be effective on the
open of RTH currently applies, and will
continue to apply, to all classes, not just
RTH Only classes (i.e., if a MarketMaker submits an SPX or VIX
appointment after 1:30 a.m., while the
Market-Maker will not be eligible to
start quoting during that current GTH
session, that appointment will be
effective starting on the open of RTH so
long as it was submitted prior to 9:00
a.m.).
The Exchange also notes that Rule
5.50(a) (Market-Maker Appointments)
provides that a Market-Maker’s selected
class appointment applies to classes
during all trading sessions. In other
words, if a Market-Maker selects an
appointment in SPX options, for
example, that appointment would apply
during both GTH and RTH (and thus,
the Market-Maker would have an
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appointment to make markets in SPX
during GTH and RTH). As a result, the
Market-Maker continuous quoting
obligations set forth in Rule 5.52(d)
applies to the class for an entire trading
day (including both trading sessions).
Pursuant to Rule 5.52(d), a MarketMaker must enter continuous bids and
offers in 60% of the series of the MarketMaker’s appointed classes, excluding
any adjusted series, any intra-day addon series on the day during which such
series are added for trading, any
Quarterly Option series, and any series
with an expiration of greater than 270
days.28 The Exchange calculates this
requirement by taking the total number
of seconds the Market-Maker
disseminates quotes in each appointed
class (excluding the series noted above)
and dividing that time by the eligible
total number of seconds each appointed
class is open for trading that day. The
Exchange also notes however, that
pursuant to Rule 5.52(d)(2)(E), the
obligations apply only when the MarketMaker is quoting in a particular class
during a given trading day and the
obligations are not applicable to an
appointed class if a Market-Maker is not
quoting in that appointed class.
Accordingly, if a Market-Maker does not
wish to quote during the proposed new
GTH hours (8:15 p.m. to 3:00 a.m.) but
does quote the current GTH hours (3:00
a.m. to 9:15 a.m.), then so long as the
Market-Maker doesn’t log in and quote
before 3:00 a.m., the time between 8:15
p.m. and 3:00 a.m. won’t be considered
when determining a Market-Maker’s
compliance with the quoting
obligations. Similarly, for example, if a
Market-Maker quotes only from 8:15
p.m. to 3:00 a.m. and then logs out, the
time between 3:00 a.m. and 9:15 a.m.
will not be considered when
determining compliance. Accordingly,
the extension of GTH will have a de
minimis, if any, impact on a MarketMaker’s continuous quoting obligations,
as they may continue to choose when to
actively quote and have their obligations
to their appointed classes apply.
Moreover, selecting an appointment in
SPX or VIX options will be optional and
within the discretion of a Market-Maker.
Additionally, Market-Makers have the
opportunity to quote during GTH (and
receive the benefits of acting as a
Market-Maker with respect to
transactions it effects during that time)
without obtaining an additional Trading
Permit or creating additional
connections to the Exchange. Given this
ease of access to the GTH trading
session, the Exchange believes MarketMakers may be encouraged to quote
28 See
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during the trading session, even as
amended. The Exchange believes
Market-Makers will continue to have an
incentive to quote during GTH given the
significance of the SPX and VIX within
the financial markets, the expected
demand, and given that the related
futures also trading during those hours
(which may permit execution of certain
hedging strategies). The Exchange
believes continuing to extend a MarketMaker’s appointment to GTH
notwithstanding the proposed extension
of the trading session will enhance
liquidity during that trading session,
which benefits all investors during
those hours. Therefore, the Exchange
believes the proposed rule change
provides customer trading interest with
a net benefit and continues to maintain
a balance of Market-Maker benefits and
obligations.
With respect to Lead-Market-Makers
(‘‘LMMs’’), the Exchange plans to utilize
the same LMM structure it uses today
during GTH. More specifically, Rule
3.55 (LMMS) currently provides that the
Exchange may approve one or more
Market-Makers to act as LMMs in each
class during GTH. Further,
subparagraph (b) of Rule 5.55 (LMMs)
provides that if a LMM is approved to
act as an LMM during GTH, then the
LMM must comply with the continuous
quoting obligation and other obligations
of Market-Makers set forth in Rule
5.52(d)(2) but does not have to comply
with the obligations under Rule 5.55(a).
Additionally, subparagraph (a)(2)(B)(iv)
of Rule 5.32 (Order and Quote Book
Processing, Display, Priority and
Execution) provides that the DPM/
LMM/PMM participation entitlement
does not apply during GTH. LMMs
appointed in the GTH session will
therefore continue to not be obligated to
satisfy heightened continuous quoting
and opening quoting standards during
GTH, nor will they receive a benefit in
exchange for satisfying an obligation
(i.e., LMMs do and will not receive a
participation entitlement during GTH).
The Exchange instead will adopt via a
separate rule filing an incentive program
that provides appointed LMMs a rebate
if they meet certain heightened
continuous quoting standards during
the proposed additional hours, which
the Exchange believes will encourage
LMMs to provide significant liquidity
during this time.
FLEX
Subparagraph (b) of Rule 5.71
(Opening of FLEX Trading) currently
sets forth the times that FLEX traders
may begin submitting FLEX Orders into
an electronic FLEX Auction, a FLEX
AIM, or a FLEX SAM or initiate an open
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outcry FLEX Auction on the trading
floor for the RTH and GTH sessions. The
Exchange proposes to update the time
FLEX traders may submit such orders
during GTH from after 3:00 a.m. (which
is the current start time of the GTH
session) to after 8:15 p.m. the previous
day (which is the proposed start time of
the GTH session).
Discussion
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As discussed above, rules that
currently apply to the GTH trading
session will continue to apply in the
same manner to the expanded GTH
session, albeit certain cutoff times and
commencement times will be updated
to reflect the proposed new start time of
the GTH session. The Exchange also
notes the following:
• All TPHs will continue to be
allowed to, but will not be required to,
participate during GTH.29 As noted
above, while a Market-Maker’s
appointment to an All Sessions class
will apply to that class whether it
quotes in series in that class or not
during GTH, the Exchange believes the
proposed lengthening of the GTH
session will have a de minimis, if any,
impact on a Market-Maker’s continuous
quoting obligations, as they may
continue to choose when to actively
quote and have their obligations to their
appointed classes apply. Additionally,
even if a Market-Maker elects to not
quote during part of GTH, its ability to
satisfy its continuous quoting obligation
will not be substantially impacted given
the few classes that will be listed for
trading during GTH.
• The Exchange will continue to use
the same connection lines, message
formats, and feeds during RTH and
GTH.30 TPHs may use the same ports
and EFIDs 31 for each trading session.32
Accordingly, the Exchange expects
TPHs that want to trade during the
29 In order to participate in GTH, including the
proposed additional hours, a TPH must have a letter
of guarantee from a Clearing TPH that is properly
authorized by the Options Clearing Corporation
(‘‘OCC’’) to operate during the GTH session. See
Cboe Options Rule 3.61. A letter of guarantee from
a Clearing TPH authorized to operate during the
GTH session will allow a TPH to participate in the
entire GTH session, (i.e., from 8:15 p.m. to 9:15
a.m.).
30 The same telecommunications lines used by
TPHs during RTH and/or GTH today may be used
during GTH, even as extended, and these lines will
be connected to the same application server at the
Exchange during both trading sessions.
31 The term ‘‘EFID’’ means an Executing Firm ID.
The Exchange assigns an EFID to a TPH, which the
System uses to identify the TPH and the clearing
number for the execution of orders and quotes
submitted to the System with that EFID.
32 A TPH may elect to have separate ports or
EFIDs for each trading session, but the Exchange
will not require that.
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lengthened GTH session to have
minimal preparation.
• The same opening process will
continue to be used to open GTH, albeit
at an earlier start time.
• Order processing will operate in the
same manner during GTH as it does
during RTH and the current GTH
session. There will be no changes to the
ranking, display, or allocation
algorithms rules.
• There will be no changes to the
processes for clearing, settlement,
exercise, and expiration.33
• The Exchange will report Exchange
quotation and last sale information to
the Options Price Reporting Authority
(‘‘OPRA’’) pursuant to the Plan for
Reporting of Consolidated Options Last
Sale Reports and Quotation Information
(the ‘‘OPRA Plan’’) during the proposed
additional GTH hours in the same
manner it currently reports this
information to OPRA during RTH and
GTH today.34 The Exchange will also
continue to disseminate an opening
quote and trade price through OPRA
during the proposed additional GTH
hours (as it does for RTH and GTH
today). Therefore, all TPHs that elect to
trade during the proposed extended
GTH session will have access to quote
and last sale information during that
trading session. Exchange proprietary
data feeds will also continue to be
disseminated during GTH using the
same formats and delivery mechanisms
with which the Exchange disseminates
them during RTH and GTH today. Use
of these proprietary data feeds during
33 The Exchange has held discussions with the
Options Clearing Corporation, which is responsible
for clearance and settlement of all listed options
transactions and has informed the Exchange that it
will be able to clear and settle all transactions that
occur on the Exchange during the extended GTH
trading session subject to its existing requirements
for transactions executed during extended and
overnight trading sessions. See Exchange Act
Release No. 74268 (February 12, 2015), 80 FR 8917
(February 19, 2015) (SR–OCC–2014–024) (approval
of proposed rule change concerning extended and
overnight trading sessions), which applies to both
index options and index future products.
34 The OPRA Plan provides for the collection and
dissemination of last sale and quotation information
on options that are trading on the participant
exchanges. The OPRA Plan is a national market
system plan approved by the Commission pursuant
to Section 11A of the Act and Rule 608 thereunder.
See Securities Exchange Act Release No. 17638
(March 18, 1981). The full text of the OPRA Plan
is available at https://www.opraplan.com. All
operating U.S. options exchanges participate in the
OPRA Plan. The Exchange will report its best bid
and offer and executed trades to OPRA during the
proposed additional GTH hours in the same manner
that they are reported during RTH and GTH today.
The operator of OPRA has also informed the
Exchange that it will continue to include a modifier
to the disseminated information during GTH.
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59829
GTH will be optional (as they are today
during RTH and GTH).35
• The same TPHs that are required to
maintain connectivity to a backup
trading facility during RTH and GTH
today will be required to do so during
the extended GTH session.36 Because
the same connections and servers will
be used for both trading sessions, a TPH
will not be required to take any
additional action to comply with this
requirement, regardless of whether the
TPH chooses to trade during GTH.
• The Exchange will process all
clearly erroneous trade breaks during
GTH in the same manner it does during
RTH and GTH today and will have
Exchange officials available to do so.
• The Exchange will perform all
necessary surveillance coverage during
GTH.
• The Exchange may halt trading
during GTH in the interests of a fair and
orderly market in the same manner it
may during RTH and GTH today
pursuant to Rule 5.20.
Under Rule 5.22 (Market-wide
Trading Halts due to Extraordinary
Market Volatility), the Exchange will
halt trading in all classes whenever a
market-wide trading halt (commonly
known as a circuit breaker) is initiated
in response to extraordinary market
conditions. Rule 5.22(b)(1) states that
the Exchange will halt trading for 15
minutes if a Level 1 or Level 2 Market
Decline occurs after 9:30 a.m. and up to
and including 3:25 p.m. (or 12:25 p.m.
for an early scheduled close).
Additionally, the Exchange will not halt
trading if a Level 1 or Level 2 Market
Decline occurs after 3:25 p.m. (or 12:25
p.m., if applicable). Rule 5.22(b)(2)
states that the Exchange will halt
trading until the next trading day if a
Level 3 Market Decline occurs. The
Exchange notes that Rule 5.22(b)(1) will
continue not to apply during the
extended GTH session, just as it does
not apply during GTH today, as the
beginning of GTH, even as amended,
will still occur past the 15-minute halt
window for a Level 1 or Level 2 Market
Decline. Rule 5.22(b)(2) will also
continue not to apply to the GTH
session, as the GTH session is still
considered a different (i.e., the next)
trading day than the preceding RTH
session (even though the GTH session
would begin on the same calendar day
as such a halt). As such, if a Level 3
35 Any fees related to receipt of the OPRA data
feed during GTH would be included on the OPRA
fee schedule. Any fees related to receipt of the
Exchange’s proprietary data feeds during GTH will
be included on the Exchange’s fee schedule (and
will be included in a separate rule filing) or the
Exchange’s market data website, as applicable.
36 See Rule 5.24.
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Market Decline occurs at any time
during RTH, the Exchange will halt
trading in SPX and VIX only until the
start of GTH. The Exchange believes that
it is appropriate to continue to not apply
Rule 5.22(b) because, even if stock
trading was halted at the close of the
previous trading day, the condition that
led to the halt is likely to have been
resolved by the time the GTH session
starts given the length of time between
the close of the previous trading day
and the proposed start time of GTH
(approximately 4 hours). Moreover,
current Rule 5.20(a)(6) continues to
allow the Exchange to consider unusual
conditions or circumstances when
determining whether to halt trading
during GTH. To the extent a circuit
breaker caused a stock market to be
closed at the end of the prior trading
day, the Exchange could consider, for
example, whether it received notice
from stock exchanges that trading was
expected to resume (or not) the next
trading day in determining whether to
halt trading during GTH. Because the
stock markets would not begin trading
until after GTH opens, the Exchange
believes it should be able to open GTH
rather than waiting several hours to see
whether stock markets open to allow
investors to participate in GTH if the
Exchange believe such trading can occur
in a fair and orderly manner based on
then-existing circumstances, not
circumstances that existed many hours
earlier.
The Exchange understands that
systems and other issues may arise and
is committed to resolving those issues as
quickly as possible, including during
the new GTH trading hours. Thus, the
Exchange will have appropriate staff onsite and otherwise available as
necessary during GTH to handle any
technical and support issues that may
arise during those hours. Additionally,
the Exchange will have personnel
available to address any trading issues
that may arise during the additional
GTH trading hours. The Exchange is
also committed to fulfilling its
obligations as a self-regulatory
organization at all times, including
during GTH, and will have
appropriately trained, qualified
regulatory staff in place during GTH to
the extent it deems necessary to satisfy
those obligations. The Exchange
believes its surveillance procedures are
adequate to properly monitor trading
during the lengthened GTH session, but
notes if additional changes are needed
in the future, it will revise such
procedures to the extent necessary.
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Implementation Date
The Exchange will announce the
implementation date of the proposed
rule change in accordance with Rule
1.5. The Exchange also notes that it first
announced its proposal to lengthen the
current GTH session to marketparticipants via a Trade Desk notice
back in January 2021.37 Since then, the
Exchange has issued numerous updated
notices, FAQs and detailed technical
specifications.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.38 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 39 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) 40 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, the Exchange believes
the proposed rule change to expand the
hours of the Global Trading Hours
session will remove impediments to and
perfect the mechanism of a free and
open market and a national market
system. Particularly, the expansion of
GTH is a competitive initiative designed
to improve the Exchange’s marketplace
for the benefit of investors and allow the
Exchange to provide a competitive
marketplace for market participants to
trade certain products for a longer
period of time outside of RTH.
Additionally, the expansion of the GTH
trading session is designed to increase
the overlap in time that SPX and VIX
options are open alongside the related
futures contracts and further aims to
37 See Exchange Notice C2021012501 ‘‘Cboe
Options Exchange to Extended Global Trading
Hours in Q4 2021’’.
38 15 U.S.C. 78f(b).
39 15 U.S.C. 78f(b)(5).
40 Id.
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provide global market participants with
expanded access to trade the products
offered during GTH. As discussed
above, lengthening the GTH session is
designed to better help meet growing
investor demand for the ability to
manage risk more efficiently, react to
global macroeconomic events as they
are happening and adjust SPX and VIX
options positions nearly around the
clock. The proposed rule change also
provides a mechanism for the Exchange
to more effectively compete with
exchanges located outside of the United
States. Global markets have become
increasingly interdependent and linked,
both psychologically and through
improved communications technology.
This has been accompanied by an
increased desire among investors to
have access to U.S.-listed exchange
products outside of regular trading
hours, and the Exchange believes this
desire extends to its exclusively listed
products. Indeed, market participants in
the Asia Pacific region have expressed
their interest in having the ability to
participate in the GTH session during
their market hours, which coincide with
the proposed additional GTH hours. The
Exchange therefore believes that the
proposed rule change is reasonably
designed to provide an appropriate
mechanism for additional trading hours
available outside of its current RTH and
GTH sessions, while providing for
appropriate Exchange oversight
pursuant to the Act, trade reporting, and
surveillance.
The Exchange also notes that it, along
with some of its affiliated options
exchanges, already allow for trading
outside of the hours of RTH (i.e., during
the current GTH trading session).41
Furthermore, the Commission has
authorized U.S. stock exchanges to be
open for trading outside of regular
trading hours.42 Thus, the proposed rule
change to expand the hours of the GTH
session is not novel or unique.
Additionally, as noted above, futures
exchanges also operate outside of those
hours and during the hours proposed to
be added to the GTH trading session,
including the Exchange’s affiliate, CFE,
which operates during the hours the
41 See Cboe Options Rule 5.1, C2 Rule 5.1 and
Cboe EDGX Rule 21.2.
42 See e.g., Cboe BZX Exchange, Inc. Rule 1.5,
which provides for an After Hours Trading Session
which is a trading session from 4:00 p.m.–8:00 p.m.
and follows the Regular Trading Hours session
which takes place between 9:30 a.m. and 4:00 p.m.
See also Exchange Act Release No. 59963 (May 21,
2009), 74 FR 25787 (May 29, 2009) (SR–BATS–
2009–012) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change to Amend
BATS Rules to Offer an After Hours Trading
Session).
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Exchange proposes to operate the
expanded GTH trading session.43
As described in detail above, the
Exchange’s trading rules that apply to
GTH today will continue to apply
during the lengthened GTH session,
which rules have all been previously
filed with the Commission as being
consistent with the goals of the Act.
Rules that will continue to apply during
GTH include rules that protect public
customers, impose best execution
requirements on TPHs, and prohibit acts
and practices that are inconsistent with
just and equitable principles of trade as
well as fraudulent and manipulative
practices. The Exchange’s rules will also
continue to provide opportunities for
price improvement during GTH and
applies the same allocation and priority
rules that are available to the Exchange
during RTH and GTH today. The
Exchange believes, therefore, that the
rules that will apply during GTH, even
as expanded, will continue to promote
just and equitable principles of trade
and prevent fraudulent and
manipulative acts.
The proposed rule change clearly
identifies the ways in which trading
during the expanded GTH will be
different from trading during current
GTH (such as the start time for queuing
periods that will be updated in
connection with the new session start
time and the proposed absence of a
disseminated updated index value
during the new hours). This ensures that
investors are aware of any differences
relating to the proposed additional GTH
trading hours. Additionally, the
Exchange notes that it will continue to
require that disclosures be made to
customers describing these potential
risks, which will continue to further
protect investors from any additional
risks related to trading during GTH.44
The Exchange believes that, with these
disclosures, GTH remains appropriate
and beneficial. The All Sessions order 45
and RTH Only order 46 will continue to
protect investors by permitting investors
who wish only to trade during RTH
from having orders or quotes execute
outside of the RTH session, including
during the expanded GTH trading
session. Consistent with the goal of
43 See, e.g., CFE Rule 1202, which outlines the
trading schedule for futures on the Cboe Volatility
Index and includes an Extended trading session
that lasts from 5:30 p.m. (previous day to 8:30 a.m.)
CT.
44 See Cboe Options Rule 9.20.
45 An All Sessions order is an order a User
designates as eligible to trade during both GTH and
RTH. See Cboe Options Rule 5.6(c).
46 An RTH Only order is an order a User
designates as eligible to trade only during RTH or
not designated as All Sessions. See Cboe Options
Rule 5.6(c).
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17:34 Oct 27, 2021
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investor protection, the Exchange will
not allow market orders during GTH
due to the expected increased volatility
and decreased liquidity during these
hours, just as it does not currently allow
such orders during GTH today for the
same reasons.
Additionally, the Exchange believes
that the proposed rule change will foster
cooperation and coordination with
persons engaged in regulating, clearing,
settling, processing information with
respect to, and facilitating transactions
in securities, as the Exchange will
ensure that adequate staffing is available
during the proposed additional GTH
hours (as it does during current GTH
hours) to provide appropriate trading
support during those hours, as well as
Exchange officials to make any
necessary determinations under the
rules during GTH (such as trading halts
and trade nullification for obvious
errors). The Exchange is also committed
to continuing to fulfill its obligations as
a self-regulatory organization at all
times, including during GTH. The
Exchange believes its surveillance
procedures are adequate to properly
monitor trading during GTH, including
during the additional proposed trading
hours. Clearing and settlement
processes will be the same for
transactions executed during the
proposed expanded GTH trading session
as they are for transactions executing
during RTH or GTH trading session
today.
The proposed rule change further
removes impediments to a free and open
market and does not unfairly
discriminate among market participants,
as all TPHs with access to the Exchange
may trade during GTH using the same
connection lines, message formats data
feeds, and EFIDs they use during RTH
and GTH today, minimizing any
preparation efforts necessary to
participate during the expanded GTH
session. TPHs will continue not be
required to trade during GTH.
Additionally, as discussed above,
while the proposed rule change
increases the total time during which a
Market-Maker with an appointment has
the ability to quote in a selected class,
the Exchange believes this increase has
a de minimis, if any, impact on MarketMakers given that a Market-Maker’s
compliance with its continuous quoting
obligation is based on all classes in
which it has an appointment in the
aggregate and based only when a
Market-Maker is quoting it its appointed
classes. Indeed, as noted above, if a
Market-Maker who quotes during the
GTH session today does not wish to
quote during the proposed additional
GTH hours, then so long as such
PO 00000
Frm 00138
Fmt 4703
Sfmt 4703
59831
Market-Maker does not log into the
system and quote prior to 3:00 a.m. (or
whatever other time it wishes to begin
quoting), there will be no impact with
respect to the Market-Maker’s ability to
satisfy its continuous quoting
obligations. Selecting an appointment in
SPX and/or VIX options will continue to
be optional and within the discretion of
a Market-Maker. Additionally, MarketMakers continue to have the
opportunity to quote during GTH (and
receive the benefits of acting as a
Market-Maker with respect to
transactions it effects during that time)
without obtaining an additional Trading
Permit or creating additional
connections to the Exchange. The
Exchange believes Market-Makers will
have an incentive to quote in SPX and
VIX during the expanded GTH session
given the significance of these products
within the financial markets, the
expected demand, and given that the
related futures are also trading during
those hours (which may permit
execution of certain hedging strategies).
The Exchange believes continuing to
extend a Market-Maker’s appointment to
the entirety of the GTH session will
enhance liquidity during that trading
session, which benefits all investors
during those hours. The Exchange
believes that any slight additional
burden of extending the continuous
quoting obligation to the additional
hours being added to the GTH trading
session in the eligible classes would be
outweighed by the Exchange’s efforts to
add liquidity during the entire GTH
trading session in All Sessions classes,
the minimal preparation a MarketMaker may require to participate in the
GTH trading session, and the benefits to
investors that may result from that
liquidity. Therefore, the Exchange
believes the proposed rule change
provides customer trading interest with
a net benefit and continues to maintain
a balance of Market-Maker benefits and
obligations.
The proposed rule change is also
consistent with Section 11A of the Act
and Regulation NMS thereunder,
because it continues to provide for the
dissemination of transaction and
quotation information during GTH
through OPRA, pursuant to the OPRA
Plan, which the Commission approved
and indicated to be consistent with the
Act. While Section 11A and Regulation
NMS contemplate an integrated system
for trading securities, they also envision
competition between markets, and
innovation that provides marketplace
benefits to attract order flow to an
exchange does not result in unfair
competition if other markets are free to
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jspears on DSK121TN23PROD with NOTICES1
compete in the same manner.47 As
discussed, the Exchange, as well as
other options exchanges, already offer
trading sessions outside of regular
trading hours.48
Lastly, the Exchange believes the
proposed rule change to provide the
Exchange will not report a value of VIX
during the proposed additional GTH
hours will remove impediments to and
perfect the mechanism of a free and
open market and a national market
system as it will reflect the fact that the
relevant index reporting authority (i.e.,
CGI) will not disseminate updated
values during the proposed additional
GTH hours. As discussed above, the
authority to decide when and how
frequently to calculate and disseminate
index values lies solely with a reporting
authority (in this case S&P for SPX and
CGI for VIX). The proposed rule change
therefore updates the Exchange’s rule to
reflect the fact that CGI has determined
not to calculate and disseminate current
values of VIX during GTH from 8:15
p.m. to 3:00 a.m.49 Particularly, because
the proposed additional GTH hours
have not yet been implemented, CGI
cannot currently know that the SPX
option quotes displayed during the
proposed additional hours will be
sufficient to calculate accurate and
meaningful VIX indicative values in the
same manner it does during RTH and
current GTH. Indeed, the Exchange
expects that initially there will be
overall lower levels of trading during
the proposed additional GTH hours
(8:15 p.m. to 3:00 a.m.) as compared to
both RTH and the current GTH session.
Therefore, CGI has determined to not
calculate VIX spot values between 8:15
p.m. and 3:00 a.m. Also as noted above,
after the launch of the additional GTH
hours, to the extent CGI as index
calculator determines that SPX quotes
during such trading session will support
accurate VIX indicative values, CGI will
47 See Exchange Act Release Nos. 73704
(November 28, 2014), 79 FR 72044 (December 4,
2014) (SR–CBOE–2014–062) (approval of proposed
rule change for Cboe Options to extend its trading
hours outside of Regular Trading Hours); and 29237
(May 24, 1991), 46 FR 24853 (May 31, 1991) (SR–
NYSE–1990–052 and SR–NYSE–1990–053)
(approval of proposed rule change for NYSE to
extend its trading hours outside of Regular Trading
Hours). The Exchange also notes that no other U.S.
options exchange provides for trading SPX or VIX
options outside of RTH, so there is currently no
need for intermarket linkage during GTH. If another
Cboe Affiliated Exchange lists any options
authorized to trade during GTH outside of RTH,
trading of such options on the Exchange would
comply with linkage rules.
48 See, e.g., Cboe Options Rule 5.1, C2 Rule 5.1
and Cboe EDGX. Rule 21.2.
49 S&P will also continue to not calculate and
disseminate current values of the S&P 500 Index
during GTH (during both the proposed additional
hours and the current GTH session).
VerDate Sep<11>2014
17:34 Oct 27, 2021
Jkt 256001
reconsider whether to calculate and
disseminate these values during the
entirety of GTH (and the Exchange
would submit rule filings to amend the
rules, as necessary).
Further, as discussed above, since the
inception of the Exchange’s GTH trading
session in 2014, the Exchange has
disclosed the possibility that index
values on options listed for trading
during that session may not be
disseminated. In fact, when the
Exchange first adopted the GTH session,
it adopted the same rule provision it is
proposing today for the expanded hours
since neither reporting authorities for
these indexes calculated index values
during GTH when it first launched,
which rule was approved by the
Commission.50 Moreover, Rule 9.20,
provides that any TPH that accepts
orders for customers for execution
during GTH must disclose to those
customers various risks related to
trading during that trading session,
including the risk that an updated
underlying index or portfolio value or
intraday indicative value will not be
calculated or publicly disseminated
during GTH. Additionally, the closing
value of the index from the previous
trading day will still be available for
TPHs that trade during GTH. The
Exchange notes the proposed change to
Rule 5.1(c)(3) also has no impact on
trading during GTH. The Exchange
lastly notes that its affiliated exchanges’
GTH rules similarly provide that no
current index value underlying an index
option trading during the respective
exchange’s GTH session is disseminated
during or at the close of that trading
session.51
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange does not believe that the
proposed rule change to lengthen the
50 See Securities Exchange Act Release No. 34–
73704 (November 28, 2014), 79 FR 72044
(December 4, 2014) (SR–CBOE–2014–062) (order
granting accelerated approval of proposed rule
change, as modified by Amendments Nos 1 and 2,
to adopt Extended Trading Hours for SPX and VIX).
Particularly, the Exchange proposed to adopt Rule
6.1A(k), which provided ‘‘[t]he Exchange will not
report a value of an index underlying an index
option trading during Extended Trading Hours,
because the value of the underlying index will not
be recalculated during or at the close of Extended
Trading Hours.’’ It wasn’t until March 2016 that CGI
determined to calculate and make available current
values of VIX every 15 seconds during GTH.
51 See Cboe C2 Exchange, Inc. (‘‘C2’’) Rule
5.1(c)(3) and Cboe EDGX Exchange, Inc. (‘‘Cboe
EDGX’’) Rule 21.2(c)(3).
PO 00000
Frm 00139
Fmt 4703
Sfmt 4703
current GTH trading session will impose
any burden on intramarket competition
that is not necessary or appropriate in
furtherance of the purposes of the Act,
because all TPHs will be able, but not
be required, to participate during GTH,
and will be able to do so using the same
connectivity as they use during RTH
and GTH today. As discussed,
participation in GTH will be voluntary
and within the discretion of TPHs.
While the proposed rule change
increases the total time during which a
Market-Maker with either a SPX and/or
VIX appointment may be able quote, the
Exchange believes the proposal will
have a de minimis, if any, impact on a
Market-Maker’s continuous quoting
obligations, as they may continue to
choose when to actively quote and have
their obligations to their appointed
classes apply. Furthermore, selecting an
appointment in these options classes
will be optional and within the
discretion of a Market-Maker.
Additionally, Market-Makers continue
to have the opportunity to quote during
GTH (and receive the benefits of acting
as a Market-Maker with respect to
transactions it effects during that time)
without obtaining an additional Trading
Permit or creating additional
connections to the Exchange. The
Exchange believes that extending the
continuous quoting obligation to the
additional trading hours being added to
the GTH trading session in two classes
is also outweighed by the Exchange’s
efforts to add liquidity during the entire
GTH trading session in All Sessions
classes, the minimal preparation a
Market-Maker may require to participate
in the GTH trading session, and the
benefits to investors that may result
from that liquidity. Therefore, the
Exchange believes the proposed rule
change provides customer trading
interest with a net benefit and continues
to maintain a balance of Market-Maker
benefits and obligations.
The Exchange does not believe that
the proposed rule change to lengthen
the GTH trading session will impose
any burden on intermarket competition
that is not necessary or appropriate in
furtherance of the purposes of the Act,
because the proposed rule change is a
competitive initiative that will benefit
the marketplace and investors.
Additionally, all options exchanges are
free to compete in the same manner.
The Exchange further believes that the
same level of competition among
options exchanges will continue during
RTH. Because the Exchange will
continue to make only exclusively listed
products available for trading during
GTH, and because any All Sessions
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Federal Register / Vol. 86, No. 206 / Thursday, October 28, 2021 / Notices
orders that do not trade during GTH will
be eligible to trade during the RTH
trading sessions in the same manner as
all other orders submitted during RTH,
the proposed rule change will have no
effect on the national best prices or
trading during RTH. The Exchange also
believes the proposed rule change could
further increase its competitive position
outside of the United States by
providing investors with an additional
investment vehicle with respect to their
global trading strategies during times
that better correspond with parts of
regular trading hours outside of the
United States.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not:
A. Significantly affect the protection
of investors or the public interest;
B. impose any significant burden on
competition; and
C. 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 52 and Rule 19b–4(f)(6) 53
thereunder. 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 will institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
jspears on DSK121TN23PROD with NOTICES1
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:
52 15
53 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
VerDate Sep<11>2014
17:34 Oct 27, 2021
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CBOE–2021–061 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–2021–061. 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–2021–061 and
should be submitted on or before
November 18, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.54
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–23436 Filed 10–27–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93404; File No. SR–MIAX–
2021–51]
Self-Regulatory Organizations; Miami
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend the MIAX Options
Fee Schedule To Establish a Policy
Relating to Billing Errors
October 22, 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 October
14, 2021, Miami International Securities
Exchange, LLC (‘‘MIAX Options’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) a proposed rule change
as described in Items I and II below,
which Items have been prepared by the
Exchange. 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 establish a
policy relating to billing errors.
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxoptions.com/rulefilings/ at MIAX Options’ principal
office, 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 the proposed rule
change is to amend MIAX’s Fee
1 15
54 17
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2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
28OCN1
]]>Agencies
[Federal Register Volume 86, Number 206 (Thursday, October 28, 2021)]
[Notices]
[Pages 59824-59833]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-23436]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93403; File No. SR-CBOE-2021-061]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Extend
the Length of Its Current Global Trading Hours Session
October 22, 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 October 21, 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,
II, and III below, which Items have been prepared by the Exchange. The
Exchange filed the proposal as a ``non-controversial'' proposed rule
change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule
19b-4(f)(6) thereunder.\4\ The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to extend the length of its current global trading hours session
(``Global Trading Hours'' or ``GTH''). 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.
[[Page 59825]]
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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to extend the hours of its GTH session. The
proposed rule change to extend the current GTH session aims to meet
growing customer demand globally for expanded access to trade SPX and
VIX options, which are designed to help enable investors to hedge or
gain exposure to the broad U.S. market and global equity volatility.
By way of background, the Exchange currently offers two trading
sessions.\5\ Regular Trading Hours (``RTH'') and GTH. Rule 5.1
currently sets forth the trading hours for the Exchange's RTH and GTH
trading sessions. Particularly, RTH for transactions in equity options
(including options on individual stocks, ETFs, ETNs, and other
securities) are the normal business days and hours set forth in the
rules of the primary market currently trading the securities underlying
the options, except for options on ETFs, ETNs, Index Portfolio Shares,
Index Portfolio Receipts, and Trust Issued Receipts the Exchange
designates to remain open for trading beyond 4:00 p.m.\6\ but in no
case later than 4:15 p.m.\7\ RTH for transactions in index options are
from 9:30 a.m. to 4:15 p.m., subject to certain exceptions.\8\ The GTH
session currently begins at 3:00 a.m. and goes until 9:15 a.m. on
Monday through Friday.\9\ The Exchange's rules provide that the
Exchange may designate as eligible for trading during GTH any
exclusively listed index option designated for trading under Chapter 4,
Section B.\10\ Currently, SPX, VIX and XSP are approved for trading
during GTH.\11\
---------------------------------------------------------------------------
\5\ The term ``trading session'' means the hours during which
the Exchange is open for trading for Regular Trading Hours or Global
Trading Hours (each of which may referred to as a trading session).
Unless otherwise specified in the Rules or the context otherwise
indicates, all Rules apply in the same manner during each trading
session. See Rule 1.1 (Definitions).
\6\ All times referenced herein are Eastern Standard Time.
\7\ See Rule 5.1(b)(1).
\8\ See Rule 5.1(b)(2).
\9\ See Rule 5.1(c).
\10\ The Exchange notes that Rule 5.1(c)(1) inadvertently refers
to the wrong section of Chapter 4. Particularly, Rule 5.1(c)(1)
references Chapter 4, Section D, which section governs Corporate
Debt Security Options, instead of the intended reference of Chapter
4, Section B, which section governs Index Options. The Exchange
proposes to correct that inadvertent cross-reference error now.
\11\ If the Exchange designates a class of index options as
eligible for trading during GTH, FLEX Options with the same
underlying index are also deemed eligible for trading during GTH.
The Exchange also notes that although eligible, XSP is not currently
listed for trading during GTH.
---------------------------------------------------------------------------
The Exchange notes that it originally adopted the GTH trading
session due to global demand from investors to trade SPX and VIX
options, as alternatives for hedging and other investment purposes,
particularly as a complementary investment tool to VIX futures.\12\
Given that SPX and VIX options only traded during regular trading hours
prior to the adoption of the GTH session, it was historically difficult
for U.S. investors that traded in non-U.S. markets to use these
products as part of their global investment strategies. Accordingly,
the Exchange adopted the GTH session to meet that demand and allow
market participants to engage in trading these options (SPX and VIX) in
conjunction with trading VIX futures on Cboe Futures Exchange, LLC
(``CFE'') during extended hours.\13\ Currently, VIX futures are open
for trading on CFE nearly 23 hours a day, 5 days a week.\14\
---------------------------------------------------------------------------
\12\ See Securities Exchange Act Release No. 34-73017 (September
8, 2014), 79 FR 54758 (September 12, 2014) (SR-CBOE-2014-062).
\13\ Id.
\14\ See CFE Rule 1202(b).
---------------------------------------------------------------------------
The proposed rule change to extend the GTH trading session aims to
provide global market participants with expanded access to trade the
products offered during GTH. Indeed, the proposal to lengthen the
current GTH session is designed to help meet growing investor demand
for the ability to manage risk more efficiently, react to global
macroeconomic events as they are happening and adjust SPX and VIX
options positions nearly around the clock. Additionally, the Exchange
notes the proposed expanded hours overlap with the Asia Pacific
markets, thereby offering a new segment of global market participants
the opportunity to trade GTH products in their local time.
Specifically, the Exchange proposes to expand the session by starting
the GTH session at 8:15 p.m. on the immediately preceding calendar day,
rather than at the current start time of 3:00 a.m.\15\ The GTH session
would continue to end at 9:15 a.m. Transactions effected during the GTH
session will have the same trade date as the RTH session that
immediately follows it.\16\ The proposed rule change otherwise makes no
changes to the trading rules applicable to GTH. The GTH trading session
will continue to be a separate trading session from RTH and the rules
that currently apply (or don't apply) to the current GTH session will
continue to apply (or not apply) to the lengthened GTH session.\17\ The
Exchange will continue to use the same servers and hardware during the
lengthened GTH session as it uses for RTH and GTH today. Further,
Trading Permit Holders (``TPHs'') may continue to use the same ports
and connections to the Exchange for both trading sessions. The Book
used during the lengthened GTH session will also be the same Book used
currently during RTH and GTH. The Exchange proposes to amend and
conform various rules to relating to the proposed expanded GTH, as
described more fully below.
---------------------------------------------------------------------------
\15\ For example, the GTH trading session for Mondays currently
begins on Mondays at 3:00 a.m. Pursuant to the proposed rule change,
a Monday GTH trading session will commence on the immediately
preceding Sunday at 8:15 p.m.
\16\ Transactions effected between 8:15 p.m. to 11:59 p.m. would
be considered to have the trade date of the following business day.
For example, any transactions effected during the GTH session that
begins at 8:15 p.m. on Tuesday, November 23 will be considered to
have the trade date of Wednesday, November 24 regardless of whether
the trades were effected between 8:15 p.m. and 11:59 p.m. on
Tuesday, November 23 or between 12:00 a.m. and 9:15 a.m. on
Wednesday November 24.
\17\ For example, business conduct rules in Chapter 8 and rules
related to doing business with the public in Chapter 9 will continue
to apply during the GTH session. Additionally, a broker-dealer's due
diligence and best execution obligations apply during the GTH
trading session. As there will still be no open outcry trading on
the floor during the GTH trading, Chapter 5, Section G will continue
not to apply as such rules pertain to manual order handling and
open-outcry trading.
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Trading Days and Hours
As noted above, Rule 5.1 (Trading Days and Hours) currently sets
forth the trading hours for RTH and GTH. The Exchange proposes to amend
Rule 5.1 in connection with its proposal to lengthen the GTH session.
Particularly, the Exchange proposes to amend Rule 5.1(c), which sets
forth the trading hours for the GTH session, to provide that except
under unusual conditions as may be determined by the Exchange, GTH
hours are from 8:15 p.m. (previous day) to 9:15 a.m. on Monday through
Friday (instead of 3:00 a.m. to 9:15 a.m. Monday through Friday). The
Exchange also proposes to add language providing that the hours for the
GTH session that
[[Page 59826]]
follows any holiday listed under Rule 5.1(d) \18\ will be from 12:00
a.m. (the calendar day immediately following the day the holiday is
observed) until 9:15 a.m., unless the holiday is observed on a Friday,
in which case, GTH hours for the subsequent GTH session will start at
8:15 p.m. on the Sunday following the holiday (observed) until 9:15
a.m.\19\ The Exchange proposes to start the GTH session that follows a
holiday (other than holidays observed on Fridays) at 12:00 a.m. on the
trading day immediately following the holiday (observed) because
current Rule 5.1(d) provides the Exchange is not open for business on
those holidays. The proposed rule change therefore ensures the proposed
extended GTH session remains consistent with the current language of
Rule 5.1(d) (i.e., the Exchange remains closed for business on
holidays).
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\18\ Rule 5.1(d) provides that the Exchange is not open for
business on the following holidays: New Year's Day, Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
\19\ For example, the GTH session that follows Thanksgiving
(observed this year on November 25, 2021), will begin at 12:00 a.m.
on Friday, November 26, 2021 and end at 9:15 a.m. Because Christmas
in 2021 will be observed on a Friday, the GTH session that follows
the observed holiday on Friday, December 24, 2021, will start at
8:15 p.m. on Sunday, December 26, 2021 and end at 9:15 a.m.
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Index Values
The Exchange next proposes to amend Rule 5.1(c)(3) which currently
provides that while it may not be calculated and disseminated at all
times during GTH, current values of the VIX Index (i.e., intraday/spot
values of the VIX Index) will be widely disseminated at least once
every 15 seconds by OPRA or one or more major market vendors during
that trading session. Rule 5.1(c)(3) also provides no current index
value underlying any other index option trading during GTH is
disseminated during or at the close of that trading session.
Pursuant to Rules 4.10(f) and (g), to list options on a broad-based
index (currently, the only options that trade during GTH overlying
broad-based indexes), current indexes values must be widely
disseminated at least once every 15 seconds. The initial purpose of
having a rule provision regarding the potential lack of dissemination
of index values during GTH was to supersede those requirements with
respect to GTH, as index reporting authorities may not disseminate
updated values outside of regular trading hours. Moreover, the Exchange
notes authority to decide when and how frequently to calculate and
disseminate index values lies solely with a reporting authority.
Currently, S&P Dow Jones Indices LLC (``S&P'') does not disseminate
current values of the S&P 500 Index during GTH, whereas Cboe Global
Indices, LLC (``CGI'') \20\ currently does disseminate current values
of the VIX Index for most (but not all) \21\ of the GTH session. While
CGI plans to continue its current dissemination of VIX Index values
during the current GTH hours (i.e., between 3:00 a.m. to 9:15 a.m.), it
does not intend to calculate or disseminate current values of the VIX
Index during the proposed additional GTH hours (i.e., from 8:15 p.m. to
3:00 a.m.). The proposed rule change therefore amends Rule 5.1(c)(3) to
reflect this change and clarify that current values of VIX will be
widely disseminated at least once every fifteen (15) seconds by the
Options Price Reporting Authority or one or more major market vendors
during that trading session only between 3:00 a.m. to 9:15 a.m. and
further provide that between 8:15 p.m. to 3:00 a.m. the Exchange will
not report a value of an index underlying an index option trading
during GTH, because the value of the underlying indexes of index
options trading during GTH (i.e., SPX and VIX) will not be recalculated
during this time.
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\20\ CGI is an affiliate of the Exchange and is the reporting
authority for the Cboe Volatility Index (the ``VIX Index'') (which
underlies VIX options the Exchange currently lists for trading) and
the Cboe Short-Term Volatility Index (``VIX9D) (which underlies VXST
options the Exchange is authorized to, but does not, list for
trading).
\21\ There may be times when a current value is not available,
such as if CGI (as reporting authority) does not begin making
current index values available until after a certain amount of time
(approximately 15 minutes) has passed following the open of the
current GTH session (for example, to ensure sufficient quotes in
series used to calculate the index values) or if there are technical
issues preventing CGI (as reporting authority) from calculating
index values. During the times the current value of VIX is not
available (and thus not disseminated) during current GTH, VIX
options will continue to be listed for trading during that trading
session.
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The Exchange notes that since the inception of the Exchange's GTH
trading session in 2014, the Exchange has disclosed the possibility
that index values on options listed for trading during that session may
not be disseminated. Particularly, VIX is intended to represent the
market's expectation of S&P 500 volatility over the next 30 days. The
accuracy of the calculation for VIX indicative (or spot) values depends
on the quality of bid and offer quotes for constituent SPX options
series. As the proposed additional GTH hours has yet to be implemented,
CGI cannot currently know that the SPX option quotes displayed during
those hours will be sufficient to calculate accurate and meaningful VIX
indicative values in the same manner it does during RTH or the current
GTH session. Indeed, the Exchange expects that initially there will be
overall lower levels of trading during the proposed additional GTH
hours (8:15 p.m. to 3:00 a.m.) as compared to both RTH and the current
GTH session. Therefore, CGI has determined to not calculate VIX spot
values during the proposed additional GTH hours. After the launch of
extended GTH, to the extent CGI as index calculator determines that SPX
quotes during such additional hours will support accurate VIX
indicative values, CGI will reconsider whether to calculate and
disseminate these values during the entirety of GTH (and the Exchange
would submit rule filings to amend the rules, as necessary). The
Exchange notes that it similarly did not report a value of an index
underlying an index option trading during GTH when the GTH session was
first adopted.\22\ Additionally, pursuant to Rule 9.20, any TPH that
accepts orders for customers for execution during GTH must disclose to
those customers various risks related to trading during that trading
session, including the risk that an updated underlying index or
portfolio value or intraday indicative value will not be calculated or
publicly disseminated during GTH. Further, the closing value of the
index from the previous trading day will still be available for TPHs
that trade during GTH. The proposed change to Rule 5.1(c)(3) also has
no impact on trading during GTH. The Exchange lastly notes that the
proposed change is also consistent with the rules of its affiliated
exchanges that have a GTH session.\23\
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\22\ See Securities Exchange Act Release No. 34-73704 (November
28, 2014), 79 FR 72044 (December 4, 2014) (SR-CBOE-2014-062) (order
granting accelerated approval of proposed rule change, as modified
by Amendments Nos 1 and 2, to adopt Extended Trading Hours for SPX
and VIX). Particularly, the Exchange proposed to adopt Rule 6.1A(k),
which provided ``[t]he Exchange will not report a value of an index
underlying an index option trading during Extended Trading Hours,
because the value of the underlying index will not be recalculated
during or at the close of Extended Trading Hours.''
\23\ See Cboe C2 Exchange, Inc. (``C2'') Rule 5.1(c)(3) and Cboe
EDGX Exchange, Inc. (``Cboe EDGX'') Rule 21.2(c)(3).
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Definitions
The Exchange proposes to amend the definition of ``Business Day''
and ``Trading Day'' under Rule 1.1 (Definitions) in connection with the
proposed expansion of the GTH trading session. The terms ``business
day'' and ``trading day'' currently mean a day on
[[Page 59827]]
which the Exchange is open for trading during RTH. The definition
currently provides that a business day or trading day includes both
trading sessions on that day. As the expanded GTH session will now
begin on a calendar day different than the business day (or trading
day), the Exchange proposes to eliminate this language and adopt
clarifying language that instead provides that a business day or
trading day includes the RTH session and the GTH session that
immediately precedes it. Also, because the expanded GTH session will
begin on the same calendar day as an RTH session, the Exchange proposes
to eliminate the following language from this definition to avoid
potential confusion: ``[I]if the Exchange is not open for Regular
Trading Hours on a day, then it will not be open for Global Trading
Hours on that day.'' In its place, the Exchange proposes to clarify
that if the Exchange is not open for Regular Trading Hours on a day,
then it will not be open for a Global Trading Hours session immediately
preceding what would have otherwise been the Regular Trading Hours
session on that day. The Exchange believes the proposed amendments to
the definition to add clarity and alleviate potential confusion.
Entry of Orders, Quotes and Cancellations
The Exchange proposes to amend Rule 5.7 (Entry of Orders and
Quotes), which currently provides that Users can enter orders and
quotes into the System, or cancel previously entered orders and quotes,
from 2:00 a.m. until RTH market close, subject to certain requirements
and conditions. The Exchange first notes that Rule 5.7 inadvertently
omits to differentiate the start time for the entry of orders, quotes
and cancellations for All Sessions \24\ classes and RTH classes.\25\
The start time for RTH Classes is currently 7:30 a.m., which is
reflected accurately in Rule 5.31(b). The Exchange therefore proposes
to update Rule 5.7 to make clear that Users can enter orders and
quotes, or cancel previously entered orders and quotes, from 7:30 a.m.
until RTH market close for RTH Classes. In light of the proposal to
start the GTH session at 8:15 p.m. (instead of 3:00 a.m.), the Exchange
proposes to update the time that Users can begin entering orders and
quotes into the System (or canceling previously entered orders and
quotes) for All Sessions Classes from its current start time of 2:00
a.m. to 8:00 p.m. on the previous day. While Users will have less time
to submit orders quotes and cancellations prior to the GTH opening, the
Exchange believes having 15 minutes, as proposed, to submit orders,
quotes and cancellations in All Sessions Classes prior to the GTH
opening will to be an adequate and sufficient amount of time,
especially given that the Exchange lists only two classes for trading
during GTH.
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\24\ The term ``All Sessions class'' means an options class the
Exchange lists for trading during both GTH and RTH, which currently
is only SPX and VIX. As noted above, although eligible, XSP is not
currently listed for trading during GTH.
\25\ The term ``RTH class'' means an options class the Exchange
lists for trading during RTH only (currently all classes other than
SPX and VIX).
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Opening Auction Process
The Exchange proposes to amend Rule 5.31 (Opening Auction Process),
which rule governs opening auctions during RTH and GTH. First, the
Exchange proposes to update Rule 5.31(b) which sets forth the time the
Queuing Period begins. The Queuing Period refers to the time period
prior to the initiation of an opening rotation during which the System
accepts orders and quotes in the Queuing Book \26\ for participation in
the open rotation for the applicable session. Rule 5.31(b) currently
provides that the Queuing Period begins at 2:00 a.m. for All Sessions
Classes and at 7:30 a.m. for RTH Only Classes. The Exchange proposes to
update the Rule 5.31(b) to provide that the Queuing Period for All
Sessions Classes will begin at 8:00 p.m. (the previous day). The
Exchange believes the proposed Queuing Period still provides a
sufficient amount of time for TPHs to enter quotes and orders into the
Queuing Book for participation in the GTH opening rotation, especially
given that the Exchange lists only two classes for trading during GTH.
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\26\ The term ``Queuing Book'' means the book into which Users
may submit orders and quotes (and onto which GTC and GTD orders
remaining on the Book from the previous trading session or trading
day, as applicable, are entered) during the Queuing Period for
participation in the applicable opening rotation. Orders and quotes
on the Queuing Book may not execute until the opening rotation. The
Queuing Book for the GTH opening auction process may be referred to
as the ``GTH Queuing Book,'' and the Queuing Book for the RTH
opening auction process may be referred to as the ``RTH Queuing
Book.'' See Rule 5.31(a).
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Next, the Exchange proposes to amend Rule 5.31(c), which currently
states that beginning at 2:00 a.m. for the GTH trading session and at
8:30 a.m. for the RTH trading session, and until the conclusion of the
opening rotation for a series, the Exchange disseminates opening
auction updates for the series.\27\ The Exchange proposes to update
Rule 5.31(c) to provide that opening auction updates will be
disseminated beginning at 8:00 p.m. (the previous day) for GTH.
---------------------------------------------------------------------------
\27\ The Exchange disseminates updates every five seconds,
unless there are no updates to the opening information since the
previously disseminated update, in which case the Exchange
disseminates updates every minute, to all subscribers to the
Exchange's data feeds that deliver these messages until a series
opens. See Rule 5.31(c).
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The Exchange also proposes to amend Rule 5.31(d), which describes
the events that will trigger the opening rotation for a class during
RTH and GTH. Currently Rule 5.31(d) (2) provides that for the Global
Trading Hours session, the System initiates the opening rotation at
3:00 a.m. The Exchange proposes to update Rule 5.31(d)(2), to reflect
the new opening rotation time of 8:15 p.m. (the previous day).
The Exchange finally proposes to amend Rule 5.33 (Complex Orders).
Particularly, the Exchange proposes to amend Rule 5.33(c), which
describes the COB Opening Process, which occurs at the beginning of
each trading session and after a trading halt. The System accepts
complex orders for inclusion in the COB Opening Process at the times
and in the manner set forth in Rules 5.7 and 5.31(b), except the
Queuing Period for complex orders ends when the complex strategy opens.
Complex orders entered during the Queuing Period are not eligible for
execution until the initiation of the COB Opening Process. Rule
5.33(c)(1) currently states that the Exchange will disseminate
indicative prices and order imbalance information based on complex
orders queued in the System for the COB Opening Process beginning at
(A) 2:00 a.m. for All Sessions classes for the GTH trading session and
(B) 8:30 a.m. for RTH Only classes and 9:15 a.m. for All Sessions
classes for the RTH trading session, and updated every five seconds
thereafter until the initiation of the COB Opening Process. This
functionality provides users with information regarding the expected
COB opening, which the Exchange believes may contribute additional
transparency and price discovery to the COB Opening Process. The
Exchange proposes to amend Rule 5.33(c)(1) to reflect that in light of
the proposed extended GTH session, indicative prices and order
imbalance information will be disseminated beginning at 8:00 p.m. the
previous day (instead of 2:00 a.m.) for All Sessions classes for the
GTH trading session.
Market-Maker Rules
Current Rule 5.50(b) (Market-Maker Appointments) provides that a
Market-Maker may enter an appointment request via an Exchange-approved
electronic interface with the Exchange's systems by 2:30 a.m. for All
Sessions, which appointment becomes effective
[[Page 59828]]
on the open of the GTH trading session, or by 9:00 a.m. for RTH Only
classes, which appointment becomes effective on the open of the RTH
session. In light of the proposed change to the start time of the GTH
session, the Exchange proposes to update the time by which Market-
Makers may enter an appointment request for All Sessions classes that
would become effective at the open of the subsequent GTH trading
session. Particularly, the Exchange proposes to update the cutoff time
to submit a request for an All Sessions class appointment for the GTH
session (currently only SPX and VIX) from 2:30 a.m. to 5:30 p.m. the
previous day, which is the earliest time the Exchange may ``restart''
the System to prepare for GTH, and clarify that such appointment would
be effective upon the open of the GTH session (i.e., starting at 8:15
p.m.). The Exchange notes that it intends to additionally continue to
maintain an additional cutoff time of 1:30 a.m. for All Sessions
appointment classes. Particularly, any appointment request submitted
after 5:30 p.m. and at or prior to 1:30 a.m. would be effective
starting at 2:30 a.m. Providing for an additional appointment request
cutoff time would provide Market-Makers, including Market-Makers who
may only trade during the current GTH hours between 3:00 a.m. and 9:15
a.m., an additional opportunity to submit a request for a VIX or SPX
appointment and be able to quote the remainder of the GTH session. The
Exchange also notes that Market-Makers do not often update appointment
selections with respect to SPX and VIX and therefore believes any
changes to the appointment cutoff time(s) will have a de minimis
impact. Lastly, the Exchange proposes to clarify that the current 9:00
a.m. cutoff for class appointments to be effective on the open of RTH
currently applies, and will continue to apply, to all classes, not just
RTH Only classes (i.e., if a Market-Maker submits an SPX or VIX
appointment after 1:30 a.m., while the Market-Maker will not be
eligible to start quoting during that current GTH session, that
appointment will be effective starting on the open of RTH so long as it
was submitted prior to 9:00 a.m.).
The Exchange also notes that Rule 5.50(a) (Market-Maker
Appointments) provides that a Market-Maker's selected class appointment
applies to classes during all trading sessions. In other words, if a
Market-Maker selects an appointment in SPX options, for example, that
appointment would apply during both GTH and RTH (and thus, the Market-
Maker would have an appointment to make markets in SPX during GTH and
RTH). As a result, the Market-Maker continuous quoting obligations set
forth in Rule 5.52(d) applies to the class for an entire trading day
(including both trading sessions). Pursuant to Rule 5.52(d), a Market-
Maker must enter continuous bids and offers in 60% of the series of the
Market-Maker's appointed classes, excluding any adjusted series, any
intra-day add-on series on the day during which such series are added
for trading, any Quarterly Option series, and any series with an
expiration of greater than 270 days.\28\ The Exchange calculates this
requirement by taking the total number of seconds the Market-Maker
disseminates quotes in each appointed class (excluding the series noted
above) and dividing that time by the eligible total number of seconds
each appointed class is open for trading that day. The Exchange also
notes however, that pursuant to Rule 5.52(d)(2)(E), the obligations
apply only when the Market-Maker is quoting in a particular class
during a given trading day and the obligations are not applicable to an
appointed class if a Market-Maker is not quoting in that appointed
class. Accordingly, if a Market-Maker does not wish to quote during the
proposed new GTH hours (8:15 p.m. to 3:00 a.m.) but does quote the
current GTH hours (3:00 a.m. to 9:15 a.m.), then so long as the Market-
Maker doesn't log in and quote before 3:00 a.m., the time between 8:15
p.m. and 3:00 a.m. won't be considered when determining a Market-
Maker's compliance with the quoting obligations. Similarly, for
example, if a Market-Maker quotes only from 8:15 p.m. to 3:00 a.m. and
then logs out, the time between 3:00 a.m. and 9:15 a.m. will not be
considered when determining compliance. Accordingly, the extension of
GTH will have a de minimis, if any, impact on a Market-Maker's
continuous quoting obligations, as they may continue to choose when to
actively quote and have their obligations to their appointed classes
apply. Moreover, selecting an appointment in SPX or VIX options will be
optional and within the discretion of a Market-Maker. Additionally,
Market-Makers have the opportunity to quote during GTH (and receive the
benefits of acting as a Market-Maker with respect to transactions it
effects during that time) without obtaining an additional Trading
Permit or creating additional connections to the Exchange. Given this
ease of access to the GTH trading session, the Exchange believes
Market-Makers may be encouraged to quote during the trading session,
even as amended. The Exchange believes Market-Makers will continue to
have an incentive to quote during GTH given the significance of the SPX
and VIX within the financial markets, the expected demand, and given
that the related futures also trading during those hours (which may
permit execution of certain hedging strategies). The Exchange believes
continuing to extend a Market-Maker's appointment to GTH
notwithstanding the proposed extension of the trading session will
enhance liquidity during that trading session, which benefits all
investors during those hours. Therefore, the Exchange believes the
proposed rule change provides customer trading interest with a net
benefit and continues to maintain a balance of Market-Maker benefits
and obligations.
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\28\ See Rule 5.52(d)(2).
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With respect to Lead-Market-Makers (``LMMs''), the Exchange plans
to utilize the same LMM structure it uses today during GTH. More
specifically, Rule 3.55 (LMMS) currently provides that the Exchange may
approve one or more Market-Makers to act as LMMs in each class during
GTH. Further, subparagraph (b) of Rule 5.55 (LMMs) provides that if a
LMM is approved to act as an LMM during GTH, then the LMM must comply
with the continuous quoting obligation and other obligations of Market-
Makers set forth in Rule 5.52(d)(2) but does not have to comply with
the obligations under Rule 5.55(a). Additionally, subparagraph
(a)(2)(B)(iv) of Rule 5.32 (Order and Quote Book Processing, Display,
Priority and Execution) provides that the DPM/LMM/PMM participation
entitlement does not apply during GTH. LMMs appointed in the GTH
session will therefore continue to not be obligated to satisfy
heightened continuous quoting and opening quoting standards during GTH,
nor will they receive a benefit in exchange for satisfying an
obligation (i.e., LMMs do and will not receive a participation
entitlement during GTH). The Exchange instead will adopt via a separate
rule filing an incentive program that provides appointed LMMs a rebate
if they meet certain heightened continuous quoting standards during the
proposed additional hours, which the Exchange believes will encourage
LMMs to provide significant liquidity during this time.
FLEX
Subparagraph (b) of Rule 5.71 (Opening of FLEX Trading) currently
sets forth the times that FLEX traders may begin submitting FLEX Orders
into an electronic FLEX Auction, a FLEX AIM, or a FLEX SAM or initiate
an open
[[Page 59829]]
outcry FLEX Auction on the trading floor for the RTH and GTH sessions.
The Exchange proposes to update the time FLEX traders may submit such
orders during GTH from after 3:00 a.m. (which is the current start time
of the GTH session) to after 8:15 p.m. the previous day (which is the
proposed start time of the GTH session).
Discussion
As discussed above, rules that currently apply to the GTH trading
session will continue to apply in the same manner to the expanded GTH
session, albeit certain cutoff times and commencement times will be
updated to reflect the proposed new start time of the GTH session. The
Exchange also notes the following:
All TPHs will continue to be allowed to, but will not be
required to, participate during GTH.\29\ As noted above, while a
Market-Maker's appointment to an All Sessions class will apply to that
class whether it quotes in series in that class or not during GTH, the
Exchange believes the proposed lengthening of the GTH session will have
a de minimis, if any, impact on a Market-Maker's continuous quoting
obligations, as they may continue to choose when to actively quote and
have their obligations to their appointed classes apply. Additionally,
even if a Market-Maker elects to not quote during part of GTH, its
ability to satisfy its continuous quoting obligation will not be
substantially impacted given the few classes that will be listed for
trading during GTH.
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\29\ In order to participate in GTH, including the proposed
additional hours, a TPH must have a letter of guarantee from a
Clearing TPH that is properly authorized by the Options Clearing
Corporation (``OCC'') to operate during the GTH session. See Cboe
Options Rule 3.61. A letter of guarantee from a Clearing TPH
authorized to operate during the GTH session will allow a TPH to
participate in the entire GTH session, (i.e., from 8:15 p.m. to 9:15
a.m.).
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The Exchange will continue to use the same connection
lines, message formats, and feeds during RTH and GTH.\30\ TPHs may use
the same ports and EFIDs \31\ for each trading session.\32\
Accordingly, the Exchange expects TPHs that want to trade during the
lengthened GTH session to have minimal preparation.
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\30\ The same telecommunications lines used by TPHs during RTH
and/or GTH today may be used during GTH, even as extended, and these
lines will be connected to the same application server at the
Exchange during both trading sessions.
\31\ The term ``EFID'' means an Executing Firm ID. The Exchange
assigns an EFID to a TPH, which the System uses to identify the TPH
and the clearing number for the execution of orders and quotes
submitted to the System with that EFID.
\32\ A TPH may elect to have separate ports or EFIDs for each
trading session, but the Exchange will not require that.
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The same opening process will continue to be used to open
GTH, albeit at an earlier start time.
Order processing will operate in the same manner during
GTH as it does during RTH and the current GTH session. There will be no
changes to the ranking, display, or allocation algorithms rules.
There will be no changes to the processes for clearing,
settlement, exercise, and expiration.\33\
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\33\ The Exchange has held discussions with the Options Clearing
Corporation, which is responsible for clearance and settlement of
all listed options transactions and has informed the Exchange that
it will be able to clear and settle all transactions that occur on
the Exchange during the extended GTH trading session subject to its
existing requirements for transactions executed during extended and
overnight trading sessions. See Exchange Act Release No. 74268
(February 12, 2015), 80 FR 8917 (February 19, 2015) (SR-OCC-2014-
024) (approval of proposed rule change concerning extended and
overnight trading sessions), which applies to both index options and
index future products.
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The Exchange will report Exchange quotation and last sale
information to the Options Price Reporting Authority (``OPRA'')
pursuant to the Plan for Reporting of Consolidated Options Last Sale
Reports and Quotation Information (the ``OPRA Plan'') during the
proposed additional GTH hours in the same manner it currently reports
this information to OPRA during RTH and GTH today.\34\ The Exchange
will also continue to disseminate an opening quote and trade price
through OPRA during the proposed additional GTH hours (as it does for
RTH and GTH today). Therefore, all TPHs that elect to trade during the
proposed extended GTH session will have access to quote and last sale
information during that trading session. Exchange proprietary data
feeds will also continue to be disseminated during GTH using the same
formats and delivery mechanisms with which the Exchange disseminates
them during RTH and GTH today. Use of these proprietary data feeds
during GTH will be optional (as they are today during RTH and GTH).\35\
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\34\ The OPRA Plan provides for the collection and dissemination
of last sale and quotation information on options that are trading
on the participant exchanges. The OPRA Plan is a national market
system plan approved by the Commission pursuant to Section 11A of
the Act and Rule 608 thereunder. See Securities Exchange Act Release
No. 17638 (March 18, 1981). The full text of the OPRA Plan is
available at https://www.opraplan.com. All operating U.S. options
exchanges participate in the OPRA Plan. The Exchange will report its
best bid and offer and executed trades to OPRA during the proposed
additional GTH hours in the same manner that they are reported
during RTH and GTH today. The operator of OPRA has also informed the
Exchange that it will continue to include a modifier to the
disseminated information during GTH.
\35\ Any fees related to receipt of the OPRA data feed during
GTH would be included on the OPRA fee schedule. Any fees related to
receipt of the Exchange's proprietary data feeds during GTH will be
included on the Exchange's fee schedule (and will be included in a
separate rule filing) or the Exchange's market data website, as
applicable.
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The same TPHs that are required to maintain connectivity
to a backup trading facility during RTH and GTH today will be required
to do so during the extended GTH session.\36\ Because the same
connections and servers will be used for both trading sessions, a TPH
will not be required to take any additional action to comply with this
requirement, regardless of whether the TPH chooses to trade during GTH.
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\36\ See Rule 5.24.
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The Exchange will process all clearly erroneous trade
breaks during GTH in the same manner it does during RTH and GTH today
and will have Exchange officials available to do so.
The Exchange will perform all necessary surveillance
coverage during GTH.
The Exchange may halt trading during GTH in the interests
of a fair and orderly market in the same manner it may during RTH and
GTH today pursuant to Rule 5.20.
Under Rule 5.22 (Market-wide Trading Halts due to Extraordinary
Market Volatility), the Exchange will halt trading in all classes
whenever a market-wide trading halt (commonly known as a circuit
breaker) is initiated in response to extraordinary market conditions.
Rule 5.22(b)(1) states that the Exchange will halt trading for 15
minutes if a Level 1 or Level 2 Market Decline occurs after 9:30 a.m.
and up to and including 3:25 p.m. (or 12:25 p.m. for an early scheduled
close). Additionally, the Exchange will not halt trading if a Level 1
or Level 2 Market Decline occurs after 3:25 p.m. (or 12:25 p.m., if
applicable). Rule 5.22(b)(2) states that the Exchange will halt trading
until the next trading day if a Level 3 Market Decline occurs. The
Exchange notes that Rule 5.22(b)(1) will continue not to apply during
the extended GTH session, just as it does not apply during GTH today,
as the beginning of GTH, even as amended, will still occur past the 15-
minute halt window for a Level 1 or Level 2 Market Decline. Rule
5.22(b)(2) will also continue not to apply to the GTH session, as the
GTH session is still considered a different (i.e., the next) trading
day than the preceding RTH session (even though the GTH session would
begin on the same calendar day as such a halt). As such, if a Level 3
[[Page 59830]]
Market Decline occurs at any time during RTH, the Exchange will halt
trading in SPX and VIX only until the start of GTH. The Exchange
believes that it is appropriate to continue to not apply Rule 5.22(b)
because, even if stock trading was halted at the close of the previous
trading day, the condition that led to the halt is likely to have been
resolved by the time the GTH session starts given the length of time
between the close of the previous trading day and the proposed start
time of GTH (approximately 4 hours). Moreover, current Rule 5.20(a)(6)
continues to allow the Exchange to consider unusual conditions or
circumstances when determining whether to halt trading during GTH. To
the extent a circuit breaker caused a stock market to be closed at the
end of the prior trading day, the Exchange could consider, for example,
whether it received notice from stock exchanges that trading was
expected to resume (or not) the next trading day in determining whether
to halt trading during GTH. Because the stock markets would not begin
trading until after GTH opens, the Exchange believes it should be able
to open GTH rather than waiting several hours to see whether stock
markets open to allow investors to participate in GTH if the Exchange
believe such trading can occur in a fair and orderly manner based on
then-existing circumstances, not circumstances that existed many hours
earlier.
The Exchange understands that systems and other issues may arise
and is committed to resolving those issues as quickly as possible,
including during the new GTH trading hours. Thus, the Exchange will
have appropriate staff on-site and otherwise available as necessary
during GTH to handle any technical and support issues that may arise
during those hours. Additionally, the Exchange will have personnel
available to address any trading issues that may arise during the
additional GTH trading hours. The Exchange is also committed to
fulfilling its obligations as a self-regulatory organization at all
times, including during GTH, and will have appropriately trained,
qualified regulatory staff in place during GTH to the extent it deems
necessary to satisfy those obligations. The Exchange believes its
surveillance procedures are adequate to properly monitor trading during
the lengthened GTH session, but notes if additional changes are needed
in the future, it will revise such procedures to the extent necessary.
Implementation Date
The Exchange will announce the implementation date of the proposed
rule change in accordance with Rule 1.5. The Exchange also notes that
it first announced its proposal to lengthen the current GTH session to
market-participants via a Trade Desk notice back in January 2021.\37\
Since then, the Exchange has issued numerous updated notices, FAQs and
detailed technical specifications.
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\37\ See Exchange Notice C2021012501 ``Cboe Options Exchange to
Extended Global Trading Hours in Q4 2021''.
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\38\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \39\ 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) \40\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\38\ 15 U.S.C. 78f(b).
\39\ 15 U.S.C. 78f(b)(5).
\40\ Id.
---------------------------------------------------------------------------
In particular, the Exchange believes the proposed rule change to
expand the hours of the Global Trading Hours session will remove
impediments to and perfect the mechanism of a free and open market and
a national market system. Particularly, the expansion of GTH is a
competitive initiative designed to improve the Exchange's marketplace
for the benefit of investors and allow the Exchange to provide a
competitive marketplace for market participants to trade certain
products for a longer period of time outside of RTH. Additionally, the
expansion of the GTH trading session is designed to increase the
overlap in time that SPX and VIX options are open alongside the related
futures contracts and further aims to provide global market
participants with expanded access to trade the products offered during
GTH. As discussed above, lengthening the GTH session is designed to
better help meet growing investor demand for the ability to manage risk
more efficiently, react to global macroeconomic events as they are
happening and adjust SPX and VIX options positions nearly around the
clock. The proposed rule change also provides a mechanism for the
Exchange to more effectively compete with exchanges located outside of
the United States. Global markets have become increasingly
interdependent and linked, both psychologically and through improved
communications technology. This has been accompanied by an increased
desire among investors to have access to U.S.-listed exchange products
outside of regular trading hours, and the Exchange believes this desire
extends to its exclusively listed products. Indeed, market participants
in the Asia Pacific region have expressed their interest in having the
ability to participate in the GTH session during their market hours,
which coincide with the proposed additional GTH hours. The Exchange
therefore believes that the proposed rule change is reasonably designed
to provide an appropriate mechanism for additional trading hours
available outside of its current RTH and GTH sessions, while providing
for appropriate Exchange oversight pursuant to the Act, trade
reporting, and surveillance.
The Exchange also notes that it, along with some of its affiliated
options exchanges, already allow for trading outside of the hours of
RTH (i.e., during the current GTH trading session).\41\ Furthermore,
the Commission has authorized U.S. stock exchanges to be open for
trading outside of regular trading hours.\42\ Thus, the proposed rule
change to expand the hours of the GTH session is not novel or unique.
Additionally, as noted above, futures exchanges also operate outside of
those hours and during the hours proposed to be added to the GTH
trading session, including the Exchange's affiliate, CFE, which
operates during the hours the
[[Page 59831]]
Exchange proposes to operate the expanded GTH trading session.\43\
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\41\ See Cboe Options Rule 5.1, C2 Rule 5.1 and Cboe EDGX Rule
21.2.
\42\ See e.g., Cboe BZX Exchange, Inc. Rule 1.5, which provides
for an After Hours Trading Session which is a trading session from
4:00 p.m.-8:00 p.m. and follows the Regular Trading Hours session
which takes place between 9:30 a.m. and 4:00 p.m. See also Exchange
Act Release No. 59963 (May 21, 2009), 74 FR 25787 (May 29, 2009)
(SR-BATS-2009-012) (Notice of Filing and Immediate Effectiveness of
Proposed Rule Change to Amend BATS Rules to Offer an After Hours
Trading Session).
\43\ See, e.g., CFE Rule 1202, which outlines the trading
schedule for futures on the Cboe Volatility Index and includes an
Extended trading session that lasts from 5:30 p.m. (previous day to
8:30 a.m.) CT.
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As described in detail above, the Exchange's trading rules that
apply to GTH today will continue to apply during the lengthened GTH
session, which rules have all been previously filed with the Commission
as being consistent with the goals of the Act. Rules that will continue
to apply during GTH include rules that protect public customers, impose
best execution requirements on TPHs, and prohibit acts and practices
that are inconsistent with just and equitable principles of trade as
well as fraudulent and manipulative practices. The Exchange's rules
will also continue to provide opportunities for price improvement
during GTH and applies the same allocation and priority rules that are
available to the Exchange during RTH and GTH today. The Exchange
believes, therefore, that the rules that will apply during GTH, even as
expanded, will continue to promote just and equitable principles of
trade and prevent fraudulent and manipulative acts.
The proposed rule change clearly identifies the ways in which
trading during the expanded GTH will be different from trading during
current GTH (such as the start time for queuing periods that will be
updated in connection with the new session start time and the proposed
absence of a disseminated updated index value during the new hours).
This ensures that investors are aware of any differences relating to
the proposed additional GTH trading hours. Additionally, the Exchange
notes that it will continue to require that disclosures be made to
customers describing these potential risks, which will continue to
further protect investors from any additional risks related to trading
during GTH.\44\ The Exchange believes that, with these disclosures, GTH
remains appropriate and beneficial. The All Sessions order \45\ and RTH
Only order \46\ will continue to protect investors by permitting
investors who wish only to trade during RTH from having orders or
quotes execute outside of the RTH session, including during the
expanded GTH trading session. Consistent with the goal of investor
protection, the Exchange will not allow market orders during GTH due to
the expected increased volatility and decreased liquidity during these
hours, just as it does not currently allow such orders during GTH today
for the same reasons.
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\44\ See Cboe Options Rule 9.20.
\45\ An All Sessions order is an order a User designates as
eligible to trade during both GTH and RTH. See Cboe Options Rule
5.6(c).
\46\ An RTH Only order is an order a User designates as eligible
to trade only during RTH or not designated as All Sessions. See Cboe
Options Rule 5.6(c).
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Additionally, the Exchange believes that the proposed rule change
will foster cooperation and coordination with persons engaged in
regulating, clearing, settling, processing information with respect to,
and facilitating transactions in securities, as the Exchange will
ensure that adequate staffing is available during the proposed
additional GTH hours (as it does during current GTH hours) to provide
appropriate trading support during those hours, as well as Exchange
officials to make any necessary determinations under the rules during
GTH (such as trading halts and trade nullification for obvious errors).
The Exchange is also committed to continuing to fulfill its obligations
as a self-regulatory organization at all times, including during GTH.
The Exchange believes its surveillance procedures are adequate to
properly monitor trading during GTH, including during the additional
proposed trading hours. Clearing and settlement processes will be the
same for transactions executed during the proposed expanded GTH trading
session as they are for transactions executing during RTH or GTH
trading session today.
The proposed rule change further removes impediments to a free and
open market and does not unfairly discriminate among market
participants, as all TPHs with access to the Exchange may trade during
GTH using the same connection lines, message formats data feeds, and
EFIDs they use during RTH and GTH today, minimizing any preparation
efforts necessary to participate during the expanded GTH session. TPHs
will continue not be required to trade during GTH.
Additionally, as discussed above, while the proposed rule change
increases the total time during which a Market-Maker with an
appointment has the ability to quote in a selected class, the Exchange
believes this increase has a de minimis, if any, impact on Market-
Makers given that a Market-Maker's compliance with its continuous
quoting obligation is based on all classes in which it has an
appointment in the aggregate and based only when a Market-Maker is
quoting it its appointed classes. Indeed, as noted above, if a Market-
Maker who quotes during the GTH session today does not wish to quote
during the proposed additional GTH hours, then so long as such Market-
Maker does not log into the system and quote prior to 3:00 a.m. (or
whatever other time it wishes to begin quoting), there will be no
impact with respect to the Market-Maker's ability to satisfy its
continuous quoting obligations. Selecting an appointment in SPX and/or
VIX options will continue to be optional and within the discretion of a
Market-Maker. Additionally, Market-Makers continue to have the
opportunity to quote during GTH (and receive the benefits of acting as
a Market-Maker with respect to transactions it effects during that
time) without obtaining an additional Trading Permit or creating
additional connections to the Exchange. The Exchange believes Market-
Makers will have an incentive to quote in SPX and VIX during the
expanded GTH session given the significance of these products within
the financial markets, the expected demand, and given that the related
futures are also trading during those hours (which may permit execution
of certain hedging strategies). The Exchange believes continuing to
extend a Market-Maker's appointment to the entirety of the GTH session
will enhance liquidity during that trading session, which benefits all
investors during those hours. The Exchange believes that any slight
additional burden of extending the continuous quoting obligation to the
additional hours being added to the GTH trading session in the eligible
classes would be outweighed by the Exchange's efforts to add liquidity
during the entire GTH trading session in All Sessions classes, the
minimal preparation a Market-Maker may require to participate in the
GTH trading session, and the benefits to investors that may result from
that liquidity. Therefore, the Exchange believes the proposed rule
change provides customer trading interest with a net benefit and
continues to maintain a balance of Market-Maker benefits and
obligations.
The proposed rule change is also consistent with Section 11A of the
Act and Regulation NMS thereunder, because it continues to provide for
the dissemination of transaction and quotation information during GTH
through OPRA, pursuant to the OPRA Plan, which the Commission approved
and indicated to be consistent with the Act. While Section 11A and
Regulation NMS contemplate an integrated system for trading securities,
they also envision competition between markets, and innovation that
provides marketplace benefits to attract order flow to an exchange does
not result in unfair competition if other markets are free to
[[Page 59832]]
compete in the same manner.\47\ As discussed, the Exchange, as well as
other options exchanges, already offer trading sessions outside of
regular trading hours.\48\
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\47\ See Exchange Act Release Nos. 73704 (November 28, 2014), 79
FR 72044 (December 4, 2014) (SR-CBOE-2014-062) (approval of proposed
rule change for Cboe Options to extend its trading hours outside of
Regular Trading Hours); and 29237 (May 24, 1991), 46 FR 24853 (May
31, 1991) (SR-NYSE-1990-052 and SR-NYSE-1990-053) (approval of
proposed rule change for NYSE to extend its trading hours outside of
Regular Trading Hours). The Exchange also notes that no other U.S.
options exchange provides for trading SPX or VIX options outside of
RTH, so there is currently no need for intermarket linkage during
GTH. If another Cboe Affiliated Exchange lists any options
authorized to trade during GTH outside of RTH, trading of such
options on the Exchange would comply with linkage rules.
\48\ See, e.g., Cboe Options Rule 5.1, C2 Rule 5.1 and Cboe
EDGX. Rule 21.2.
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Lastly, the Exchange believes the proposed rule change to provide
the Exchange will not report a value of VIX during the proposed
additional GTH hours will remove impediments to and perfect the
mechanism of a free and open market and a national market system as it
will reflect the fact that the relevant index reporting authority
(i.e., CGI) will not disseminate updated values during the proposed
additional GTH hours. As discussed above, the authority to decide when
and how frequently to calculate and disseminate index values lies
solely with a reporting authority (in this case S&P for SPX and CGI for
VIX). The proposed rule change therefore updates the Exchange's rule to
reflect the fact that CGI has determined not to calculate and
disseminate current values of VIX during GTH from 8:15 p.m. to 3:00
a.m.\49\ Particularly, because the proposed additional GTH hours have
not yet been implemented, CGI cannot currently know that the SPX option
quotes displayed during the proposed additional hours will be
sufficient to calculate accurate and meaningful VIX indicative values
in the same manner it does during RTH and current GTH. Indeed, the
Exchange expects that initially there will be overall lower levels of
trading during the proposed additional GTH hours (8:15 p.m. to 3:00
a.m.) as compared to both RTH and the current GTH session. Therefore,
CGI has determined to not calculate VIX spot values between 8:15 p.m.
and 3:00 a.m. Also as noted above, after the launch of the additional
GTH hours, to the extent CGI as index calculator determines that SPX
quotes during such trading session will support accurate VIX indicative
values, CGI will reconsider whether to calculate and disseminate these
values during the entirety of GTH (and the Exchange would submit rule
filings to amend the rules, as necessary).
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\49\ S&P will also continue to not calculate and disseminate
current values of the S&P 500 Index during GTH (during both the
proposed additional hours and the current GTH session).
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Further, as discussed above, since the inception of the Exchange's
GTH trading session in 2014, the Exchange has disclosed the possibility
that index values on options listed for trading during that session may
not be disseminated. In fact, when the Exchange first adopted the GTH
session, it adopted the same rule provision it is proposing today for
the expanded hours since neither reporting authorities for these
indexes calculated index values during GTH when it first launched,
which rule was approved by the Commission.\50\ Moreover, Rule 9.20,
provides that any TPH that accepts orders for customers for execution
during GTH must disclose to those customers various risks related to
trading during that trading session, including the risk that an updated
underlying index or portfolio value or intraday indicative value will
not be calculated or publicly disseminated during GTH. Additionally,
the closing value of the index from the previous trading day will still
be available for TPHs that trade during GTH. The Exchange notes the
proposed change to Rule 5.1(c)(3) also has no impact on trading during
GTH. The Exchange lastly notes that its affiliated exchanges' GTH rules
similarly provide that no current index value underlying an index
option trading during the respective exchange's GTH session is
disseminated during or at the close of that trading session.\51\
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\50\ See Securities Exchange Act Release No. 34-73704 (November
28, 2014), 79 FR 72044 (December 4, 2014) (SR-CBOE-2014-062) (order
granting accelerated approval of proposed rule change, as modified
by Amendments Nos 1 and 2, to adopt Extended Trading Hours for SPX
and VIX). Particularly, the Exchange proposed to adopt Rule 6.1A(k),
which provided ``[t]he Exchange will not report a value of an index
underlying an index option trading during Extended Trading Hours,
because the value of the underlying index will not be recalculated
during or at the close of Extended Trading Hours.'' It wasn't until
March 2016 that CGI determined to calculate and make available
current values of VIX every 15 seconds during GTH.
\51\ See Cboe C2 Exchange, Inc. (``C2'') Rule 5.1(c)(3) and Cboe
EDGX Exchange, Inc. (``Cboe EDGX'') Rule 21.2(c)(3).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange does not
believe that the proposed rule change to lengthen the current GTH
trading session will impose any burden on intramarket competition that
is not necessary or appropriate in furtherance of the purposes of the
Act, because all TPHs will be able, but not be required, to participate
during GTH, and will be able to do so using the same connectivity as
they use during RTH and GTH today. As discussed, participation in GTH
will be voluntary and within the discretion of TPHs. While the proposed
rule change increases the total time during which a Market-Maker with
either a SPX and/or VIX appointment may be able quote, the Exchange
believes the proposal will have a de minimis, if any, impact on a
Market-Maker's continuous quoting obligations, as they may continue to
choose when to actively quote and have their obligations to their
appointed classes apply. Furthermore, selecting an appointment in these
options classes will be optional and within the discretion of a Market-
Maker. Additionally, Market-Makers continue to have the opportunity to
quote during GTH (and receive the benefits of acting as a Market-Maker
with respect to transactions it effects during that time) without
obtaining an additional Trading Permit or creating additional
connections to the Exchange. The Exchange believes that extending the
continuous quoting obligation to the additional trading hours being
added to the GTH trading session in two classes is also outweighed by
the Exchange's efforts to add liquidity during the entire GTH trading
session in All Sessions classes, the minimal preparation a Market-Maker
may require to participate in the GTH trading session, and the benefits
to investors that may result from that liquidity. Therefore, the
Exchange believes the proposed rule change provides customer trading
interest with a net benefit and continues to maintain a balance of
Market-Maker benefits and obligations.
The Exchange does not believe that the proposed rule change to
lengthen the GTH trading session will impose any burden on intermarket
competition that is not necessary or appropriate in furtherance of the
purposes of the Act, because the proposed rule change is a competitive
initiative that will benefit the marketplace and investors.
Additionally, all options exchanges are free to compete in the same
manner. The Exchange further believes that the same level of
competition among options exchanges will continue during RTH. Because
the Exchange will continue to make only exclusively listed products
available for trading during GTH, and because any All Sessions
[[Page 59833]]
orders that do not trade during GTH will be eligible to trade during
the RTH trading sessions in the same manner as all other orders
submitted during RTH, the proposed rule change will have no effect on
the national best prices or trading during RTH. The Exchange also
believes the proposed rule change could further increase its
competitive position outside of the United States by providing
investors with an additional investment vehicle with respect to their
global trading strategies during times that better correspond with
parts of regular trading hours outside of the United States.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not:
A. Significantly affect the protection of investors or the public
interest;
B. impose any significant burden on competition; and
C. 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 \52\ and
Rule 19b-4(f)(6) \53\ thereunder. 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 will institute proceedings to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\52\ 15 U.S.C. 78s(b)(3)(A).
\53\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-CBOE-2021-061 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-2021-061. 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-2021-061 and should be submitted on
or before November 18, 2021.
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\54\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\54\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-23436 Filed 10-27-21; 8:45 am]
BILLING CODE 8011-01-P
