Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 5.34, 66609-66611 [2021-25476]
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Federal Register / Vol. 86, No. 223 / Tuesday, November 23, 2021 / Notices
Rules 17Ad–22(e)(2)(i) and (v), and
(e)(5) thereunder.18
It is therefore ordered pursuant to
Section 19(b)(2) of the Act 19 that the
proposed rule change (SR–ICEEU–2021–
018) be, and hereby is, approved.20
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.21
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–25479 Filed 11–22–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93598; File No. SR–CBOE–
2021–066]
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.
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Rule 5.34
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
November 17, 2021.
1. Purpose
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 November
5, 2021, Cboe Exchange, Inc. (the
‘‘Exchange’’ or ‘‘Cboe Options’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. The
Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A)(iii) of
the Act 3 and Rule 19b–4(f)(6)
thereunder.4 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe Exchange, Inc. (the ‘‘Exchange’’
or ‘‘Cboe Options’’) proposes to amend
Rule 5.34. 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
18 17
CFR 240.17Ad–22(e)(2)(i) and (v), and (e)(5).
U.S.C. 78s(b)(2).
20 In approving the proposed rule change, the
Commission considered the proposal’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
21 17 CFR 200.30–3(a)(12).
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).
19 15
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Exchange’s Office of the Secretary, and
at the Commission’s Public Reference
Room.
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The Exchange proposes to modify the
optional duplicate order protection risk
limit setting for Users in Rule 5.34(c)(9).
Duplicate order protection is voluntary
functionality, which was designed to
protect Users against execution of
multiple identical orders that may have
been erroneously entered. Specifically,
pursuant to current Rule 5.34(c)(9), if a
User enables this functionality for a
port, then after the System receives a
specified number of duplicate orders
with the same EFID,5 side, price,
quantity, and class within a specified
time period (the User determines the
number and length of the time period),
the System will (A) reject additional
duplicate orders until it receives
instructions from the User to reset this
control or (B) reject all incoming orders
submitted through that port for that
EFID until the User contacts the Trade
Desk to request it reset this control. The
User may continue to submit cancel
requests prior to reset.
The Exchange proposes to amend this
risk setting to eliminate the time
parameter. Particularly, as amended, the
System will continue to check for a
specified number of duplicate orders
(which will continue to be determined
by the User), but no longer check to see
if any such duplicative orders were
received over a specified period of time.
Instead, the system will compare each
submitted order against the immediately
5 The term ‘‘EFID’’ means an Executing Firm ID.
The Exchange assigns an EFID to a Trading Permit
Holder, which the System uses to identify the
Trading Permit Holder and the clearing number for
the execution of orders and quotes submitted to the
System with that EFID.
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preceding order that was submitted with
respect to the orders’ EFID, side, price,
quantity, and class. For example,
suppose a User sets the duplicative
order count to 10 orders. When the
System receives an incoming order, the
System checks if the immediately
preceding order it received had the
same EFID, side, price, quantity and
class. If the order does not, then the
System keeps the count at ‘‘0’’ (and
performs the same process for the next
incoming order). If the order does, the
System will count that order as ‘‘1’’. If
the following 9 incoming orders through
that port are also duplicates (i.e., same
EFID, side, price, quantity and class),
then regardless of how long it takes for
such orders to come into the System, the
System will (i) reject any additional
duplicate orders until it receives a reset
instruction from the User or (ii) reject all
incoming orders submitted through that
port for that EFID until the User
contacts the Trade Desk to request it
reset this control, as it does today.
The Exchange has observed that the
time parameter check under the current
duplicate order protection feature can
potentially create a (albeit minor)
latency impact for Users who opt to use
the functionality. More specifically,
minor latency can arise in connection
with the specified time parameter
because the System must store and
conduct a check across all orders sent
during the specified time period when
this risk check is enabled. The Exchange
believes removing the time parameter
check will eliminate this latency for
Users that opt to use the duplicate order
protection. The Exchange does not
believe that the proposed rule change
will impact the effectiveness of the
duplicate order protection feature for
those Users that opt to enable such
functionality. Also, as noted above, the
use of the risk limit is voluntary. The
Exchange will continue to offer Users a
full suite of additional price protection
mechanisms and risk controls which the
Exchange believes sufficiently mitigate
risks associated with Users entering
orders and quotes at unintended prices,
and risks associated with orders and
quotes trading at prices that are extreme
and potentially erroneous, as a likely
result of human or operational error.
Lastly, the Exchange proposes to
correct an erroneous rule number.
Particularly, the Exchange proposes to
update Rule 5.34(c)(12) to Rule
5.34(c)(11), which follows the
immediately preceding subparagraph
(10) of Rule 5.34(c).
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
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Federal Register / Vol. 86, No. 223 / Tuesday, November 23, 2021 / Notices
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.6 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 7 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) 8 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, the proposed rule
change will remove impediments to and
perfect the mechanism of a free and
open market and national market system
and benefit investors, because the
Exchange believes it will remove small
latency that may currently be caused by
use of the duplicate order protection
functionality. Moreover, the Exchange
does not believe that the proposed rule
change will affect the protection of
investors or the public interest or the
maintenance of a fair and orderly
market because Users still have the
ability to enable such control to protect
against execution of multiple identical
orders that may have been erroneously
entered, just in a different manner (i.e.,
without a specified time parameter
check). As stated, the Exchange does not
believe that the proposed rule change
will impact the effectiveness of the
duplicate order protection feature for
those Users that opt to enable such
functionality. In addition to this, the
Exchange notes that the use of this risk
control is voluntary, and the Exchange
will continue to offer a full suite of
alternative price protection mechanisms
and risk controls.
The Exchange believes updating an
erroneous subparagraph reference in
Rule 5.34 removes impediments to and
perfects the mechanism of a free and
open market and national market system
and benefits investors, because it
eliminates potential confusion and
maintains clarity in the rules.
6 15
7 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
8 Id.
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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. In particular,
the Exchange does not believe that the
proposed rule change would impose a
burden on intramarket competition that
is not necessary or appropriate in
furtherance of the purposes of the Act
because it will amend this risk control
in the same manner for all Users on the
Exchange. In addition to this, and as
stated above, the use of the duplicative
order protection risk control is
voluntary, and the Exchange will
continue to offer various other price
protections and risk controls that
sufficiently mitigate risks associated
with market participants entering and/
or trading orders and quotes at
unintended or extreme prices. The
Exchange does not believe the proposed
rule change will impose any burden on
intermarket competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, as the
proposed rule change only updates an
existing risk control applicable to
ordered submitted to the Exchange. The
Exchange also notes that market
participants on other exchanges are
welcome to become participants on the
Exchange if they determine that this
proposed rule change has made Cboe
Options a more attractive or favorable
venue.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days after the date of
the filing, or such shorter time as the
Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 9 and Rule 19b–
4(f)(6) 10 thereunder.
9 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change at least five business days
prior to the date of filing of the proposed rule
10 17
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At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CBOE–2021–066 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–2021–066. 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
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
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Federal Register / Vol. 86, No. 223 / Tuesday, November 23, 2021 / Notices
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–CBOE–
2021–066 and should be submitted on
or before December 14, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–25476 Filed 11–22–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Self-Regulatory Organizations; Cboe
Futures Exchange, LLC; Notice of a
Filing of a Proposed Rule Change
Regarding Block Trade Recordkeeping
Requirements
November 17, 2021.
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Pursuant to Section 19(b)(7) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
November 10, 2021 Cboe Futures
Exchange, LLC (‘‘CFE’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change described in Items
I, II, and III below, which Items have
been prepared by CFE. The Commission
is publishing this notice to solicit
comments on the proposed rule change
from interested persons. CFE also has
filed this proposed rule change with the
Commodity Futures Trading
Commission (‘‘CFTC’’). CFE filed a
written certification with the CFTC
under Section 5c(c) of the Commodity
Exchange Act (‘‘CEA’’) 2 on November
10, 2021.
I. Self-Regulatory Organization’s
Description of the Proposed Rule
Change
The Exchange proposes to update the
recordkeeping requirements applicable
to Block Trades. The scope of this filing
is limited solely to the application of the
proposed rule change to security futures
that may be traded on CFE. Although no
security futures are currently listed for
trading on CFE, CFE may list security
futures for trading in the future. The text
of the proposed rule change is attached
CFR 200.30–3(a)(12).
15 U.S.C. 78s(b)(7).
2 7 U.S.C. 7a–2(c).
1
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II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, CFE
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. CFE 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
[Release No. 34–93601; File No. SR–CFE–
2021–009]
11 17
as Exhibit 4 to the filing but is not
attached to the publication of this
notice.
1. Purpose
CFE Rule 415 (Block Trades) governs
Block Trades in CFE products.3 Rule
415(e) currently requires each CFE
Trading Privilege Holder (‘‘TPH’’) that is
a party to a Block Trade to record
certain details regarding the transaction
on an order ticket. Those details include
(i) the Contract (including the
expiration); (ii) the number of contracts
traded; (iii) the price of execution or
premium; (iv) the time of execution (i.e.,
the time at which the parties agreed to
the Block Trade); (v) the arrangement
time, if any (i.e., the time at which the
parties agreed to enter into the Block
Trade at a later time); (vi) the identity
of the counterparty; (vii) that the
transaction is a Block Trade; (viii) if
applicable, the account number of the
customer for which the Block Trade was
executed; and (ix) if applicable, the
expiration, strike price, and type of
option (put or call) in the case of an
option.
The proposed rule change proposes to
revise Rule 415(e) to limit the
application of the Block Trade order
ticket requirement to any TPH that acts
as an agent for a Block Trade and to no
longer apply that requirement to any
TPH that is a party to a Block Trade in
a principal capacity and not acting in
the capacity as an agent. The proposed
rule change also proposes to add a
requirement to Rule 415(e) that each
TPH involved in any Block Trade either
maintain records evidencing
compliance with the criteria set forth in
3 A Block Trade is a large transaction in a
Contract listed on CFE that is negotiated off of
CFE’s trading facility and is then reported to CFE
which meets the parameters for a Block Trade
under CFE’s rules.
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66611
Rule 415 or be able to obtain those
records from its customer involved in
the Block Trade. Finally, consistent
with these changes, the proposed rule
change proposes to revise a current
cross-reference in Rule 415(e) to an
order ticket in this context by referring
to the order ticket as ‘‘any required
order ticket’’ instead of the current
description of ‘‘the order ticket referred
to in the preceding sentence.’’
These proposed rule amendments are
consistent with comparable provisions
included in CFE Rule 414 (Exchange of
Contract for Related Position), which
governs exchange of contract for related
position (‘‘ECRP’’) transactions
involving CFE products.4 In particular,
Rule 414(g) includes a similar provision
to the provision in Rule 415(e) regarding
the details of an ECRP transaction that
must be recorded on an order ticket and
that provision of Rule 414(g) is
applicable solely to any TPH that acts as
an agent for an ECRP transaction.
Similarly, the new requirement that the
proposed rule change is proposing to
add to Rule 415(e) regarding the
maintenance of records evidencing
compliance with Rule 415 is the same
requirement that is included in the first
sentence of Rule 414(h) related to ECRP
transactions. Accordingly, the proposed
rule change proposes to align the order
ticket requirement appliable to Block
Trades with the corresponding order
ticket requirement applicable to ECRP
transactions. Additionally, the proposed
rule change proposes to make clear that
any TPH involved in a Block Trade
must maintain records of the Block
Trade evidencing compliance with the
criteria in Rule 415 or be able to obtain
those records from its customer
involved in the Block Trade.
Block Trades and ECRP transactions
are the two primary types of offexchange transactions that are permitted
under CFE rules. Given the similarities
between these two types of transactions,
Block Trades and ECRP transactions are
subject to similar recordkeeping and
reporting requirements. Accordingly,
CFE believes that it is appropriate to
align the order ticket requirement
4 An ECRP transaction consists of a transaction
in a Contract listed on CFE and a transaction in a
related position that is negotiated off of CFE’s
trading facility and is then reported to CFE which
meets the parameters for an ECRP transaction under
CFE’s rules. The related position must have a high
degree of price correlation to the underlying of the
Contract transaction so that the Contract transaction
would serve as an appropriate hedge for the related
position. In every ECRP transaction, one party is the
buyer of (or the holder of the long market exposure
associated with) the related position and the seller
of the corresponding Contract and the other party
is the seller of (or the holder of the short market
exposure associated with) the related position and
the buyer of the corresponding Contract.
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]]>Agencies
[Federal Register Volume 86, Number 223 (Tuesday, November 23, 2021)]
[Notices]
[Pages 66609-66611]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-25476]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93598; File No. SR-CBOE-2021-066]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Rule 5.34
November 17, 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 November 5, 2021, Cboe Exchange, Inc. (the ``Exchange'' or
``Cboe Options'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I
and II below, which Items have been prepared by the Exchange. The
Exchange filed the proposal as a ``non-controversial'' proposed rule
change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule
19b-4(f)(6) thereunder.\4\ The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to amend Rule 5.34. The text of the proposed rule change is provided in
Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's website (https://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to modify the optional duplicate order
protection risk limit setting for Users in Rule 5.34(c)(9). Duplicate
order protection is voluntary functionality, which was designed to
protect Users against execution of multiple identical orders that may
have been erroneously entered. Specifically, pursuant to current Rule
5.34(c)(9), if a User enables this functionality for a port, then after
the System receives a specified number of duplicate orders with the
same EFID,\5\ side, price, quantity, and class within a specified time
period (the User determines the number and length of the time period),
the System will (A) reject additional duplicate orders until it
receives instructions from the User to reset this control or (B) reject
all incoming orders submitted through that port for that EFID until the
User contacts the Trade Desk to request it reset this control. The User
may continue to submit cancel requests prior to reset.
---------------------------------------------------------------------------
\5\ The term ``EFID'' means an Executing Firm ID. The Exchange
assigns an EFID to a Trading Permit Holder, which the System uses to
identify the Trading Permit Holder and the clearing number for the
execution of orders and quotes submitted to the System with that
EFID.
---------------------------------------------------------------------------
The Exchange proposes to amend this risk setting to eliminate the
time parameter. Particularly, as amended, the System will continue to
check for a specified number of duplicate orders (which will continue
to be determined by the User), but no longer check to see if any such
duplicative orders were received over a specified period of time.
Instead, the system will compare each submitted order against the
immediately preceding order that was submitted with respect to the
orders' EFID, side, price, quantity, and class. For example, suppose a
User sets the duplicative order count to 10 orders. When the System
receives an incoming order, the System checks if the immediately
preceding order it received had the same EFID, side, price, quantity
and class. If the order does not, then the System keeps the count at
``0'' (and performs the same process for the next incoming order). If
the order does, the System will count that order as ``1''. If the
following 9 incoming orders through that port are also duplicates
(i.e., same EFID, side, price, quantity and class), then regardless of
how long it takes for such orders to come into the System, the System
will (i) reject any additional duplicate orders until it receives a
reset instruction from the User or (ii) reject all incoming orders
submitted through that port for that EFID until the User contacts the
Trade Desk to request it reset this control, as it does today.
The Exchange has observed that the time parameter check under the
current duplicate order protection feature can potentially create a
(albeit minor) latency impact for Users who opt to use the
functionality. More specifically, minor latency can arise in connection
with the specified time parameter because the System must store and
conduct a check across all orders sent during the specified time period
when this risk check is enabled. The Exchange believes removing the
time parameter check will eliminate this latency for Users that opt to
use the duplicate order protection. The Exchange does not believe that
the proposed rule change will impact the effectiveness of the duplicate
order protection feature for those Users that opt to enable such
functionality. Also, as noted above, the use of the risk limit is
voluntary. The Exchange will continue to offer Users a full suite of
additional price protection mechanisms and risk controls which the
Exchange believes sufficiently mitigate risks associated with Users
entering orders and quotes at unintended prices, and risks associated
with orders and quotes trading at prices that are extreme and
potentially erroneous, as a likely result of human or operational
error.
Lastly, the Exchange proposes to correct an erroneous rule number.
Particularly, the Exchange proposes to update Rule 5.34(c)(12) to Rule
5.34(c)(11), which follows the immediately preceding subparagraph (10)
of Rule 5.34(c).
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the
[[Page 66610]]
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.\6\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \7\ 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) \8\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
\8\ Id.
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In particular, the proposed rule change will remove impediments to
and perfect the mechanism of a free and open market and national market
system and benefit investors, because the Exchange believes it will
remove small latency that may currently be caused by use of the
duplicate order protection functionality. Moreover, the Exchange does
not believe that the proposed rule change will affect the protection of
investors or the public interest or the maintenance of a fair and
orderly market because Users still have the ability to enable such
control to protect against execution of multiple identical orders that
may have been erroneously entered, just in a different manner (i.e.,
without a specified time parameter check). As stated, the Exchange does
not believe that the proposed rule change will impact the effectiveness
of the duplicate order protection feature for those Users that opt to
enable such functionality. In addition to this, the Exchange notes that
the use of this risk control is voluntary, and the Exchange will
continue to offer a full suite of alternative price protection
mechanisms and risk controls.
The Exchange believes updating an erroneous subparagraph reference
in Rule 5.34 removes impediments to and perfects the mechanism of a
free and open market and national market system and benefits investors,
because it eliminates potential confusion and maintains clarity in the
rules.
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. In particular, the Exchange
does not believe that the proposed rule change would impose a burden on
intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act because it will amend this risk
control in the same manner for all Users on the Exchange. In addition
to this, and as stated above, the use of the duplicative order
protection risk control is voluntary, and the Exchange will continue to
offer various other price protections and risk controls that
sufficiently mitigate risks associated with market participants
entering and/or trading orders and quotes at unintended or extreme
prices. The Exchange does not believe the proposed rule change will
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as the proposed
rule change only updates an existing risk control applicable to ordered
submitted to the Exchange. The Exchange also notes that market
participants on other exchanges are welcome to become participants on
the Exchange if they determine that this proposed rule change has made
Cboe Options a more attractive or favorable venue.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate, it has become effective
pursuant to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6)
\10\ thereunder.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-CBOE-2021-066 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-2021-066. 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
[[Page 66611]]
office of the Exchange. All comments received will be posted without
change; the Commission does not edit personal identifying information
from submissions. You should submit only information that you wish to
make available publicly. All submissions should refer to File Number
SR-CBOE-2021-066 and should be submitted on or before December 14,
2021.
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\11\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-25476 Filed 11-22-21; 8:45 am]
BILLING CODE 8011-01-P
