Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Withdrawal of a Proposed Rule Change To Amend Exchange Rule 14.11(d) To Accommodate Exchange Listing and Trading of Options-Linked Securities, 71389 [2022-25359]
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Federal Register / Vol. 87, No. 224 / Tuesday, November 22, 2022 / Notices
SECURITIES AND EXCHANGE
COMMISSION
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–96333; File No. SR–
NYSEARCA–2022–77]
[Release No. 34–96335; File No. SRCboeBZX–2022–043]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of
Withdrawal of a Proposed Rule Change
To Amend Exchange Rule 14.11(d) To
Accommodate Exchange Listing and
Trading of Options-Linked Securities
November 16, 2022.
On August 18, 2022, Cboe BZX
Exchange, Inc. (‘‘BZX’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to amend BZX Rule 14.11(d) to
accommodate the listing and trading of
Options-Linked Securities.
The proposed rule change was
published for comment in the Federal
Register on September 8, 2022.3 On
October 14, 2022, pursuant to Section
19(b)(2) of the Act,4 the Commission
designated a longer period within which
to approve the proposed rule change,
disapprove the proposed rule change, or
institute proceedings to determine
whether to disapprove the proposed
rule change.5 The Commission received
no comment letters on the proposed rule
change.
On November 10, 2022, the Exchange
withdrew the proposed rule change
(SR–CboeBZX–2022–043).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022–25359 Filed 11–21–22; 8:45 am]
BILLING CODE 8011–01–P
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend 6.41P–O
November 16, 2022.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on
November 9, 2022, NYSE Arca, Inc.
(‘‘NYSE Arca’’ or the ‘‘Exchange’’) 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 selfregulatory organization. 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 amend
6.41P–O (Price Reasonability Checks—
Orders and Quotes). The proposed rule
change is available on the Exchange’s
website at www.nyse.com, at the
principal office of the Exchange, 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
self-regulatory organization 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 those 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 parts of such
statements.
khammond on DSKJM1Z7X2PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1 15
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 95655
(Sept. 1, 2022), 87 FR 55068.
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 96077,
87 FR 63830 (Oct. 20, 2022).
6 17 CFR 200.30–3(a)(12).
VerDate Sep<11>2014
17:48 Nov 21, 2022
Jkt 259001
1. Purpose
The Exchange proposes to amend
Rule 6.41P–O (Price Reasonability
Checks—Orders and Quotes) to modify
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
PO 00000
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71389
the application of certain risk checks on
Pillar as set forth below.
The Exchange recently revised Rule
6.41P–O to clarify the application of the
‘‘Price Reasonability Checks’’ to orders
and quotes, which include the Arbitrage
Check and the Intrinsic Value Check
(collectively, the ‘‘Checks’’), when such
Checks rely on last sale information.4 In
particular, the Exchange modified the
rule to reflect Pillar functionality that
excluded from the Checks those
transactions (such as odd lot
transactions) that are not ‘‘last-sale
eligible.’’ However, the Exchange has
determined to modify the operation of
the Checks under Pillar such that they
apply to trades in underlying securities
of any size, including odd lots.5 The
Exchange believes that applying the
Checks based on a broader range of
underlying transactions—both round
lots and odd lots—would enhance the
efficacy of the Checks as this proposed
functionality would provide a better
representation of the trade prices
occurring in the underlying market.6 As
such, the Exchange believes that the
proposed functionality would continue
to provide price protection to OTP
Holders and OTP Firms.
As proposed, the Arbitrage Check
would reject or cancel (if resting) a buy
order or quote for call options if the
price of the order or quote is equal to
or greater than the price of the last trade
(of any size) of the underlying security
on the Primary Market, plus a specified
threshold to be determined by the
Exchange and announced by Trader
Update.7 Regarding the Intrinsic Value
Check, the Exchange proposes that the
Intrinsic Value of a put option would be
equal to the strike price minus the price
of the last trade (of any size) of the
underlying security on the Primary
Market’’ and the Intrinsic Value of a call
option would be equal to the price of
4 See Rule 6.41P–O(b) and (c) (describing the
Arbitrage Check and the Intrinsic Value Check,
respectively). See Securities Exchange Act Release
No. 95088 (June 13, 2022), 87FR 36556 (June 17,
2022) (SR–NYSEArca–2022–34) (immediately
effective filing to modify Rule 6.41P–O(b) and (c)
to use as a basis for the Check ‘‘the price of the
last—sale eligible trade’’ of the underlying security,
rather than the ‘‘last sale price’’ of the underlying
security).
5 The Exchange notes, prior to migrating to Pillar,
the Exchange included odd lots in its application
of the Arbitrage Check and Intrinsic Value Check,
per Rules 6.60–O (Price Protection—Orders) and
6.61–O (Price Protection—Quotes). See also NYSE
American LLC (‘‘NYSE American’’) Rules 967NY
(c)(1), (2) and 967.1NY (regarding the application of
Arbitrage Checks and Intrinsic Value Checks to
orders and quotes, respectively).
6 The Exchange notes that trades in higher-priced
underlying securities tend to be odd lots, which
highlights the importance of capturing such trades
in the Checks.
7 See Rule 6.41P–O(b)(2).
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]]>Agencies
[Federal Register Volume 87, Number 224 (Tuesday, November 22, 2022)]
[Notices]
[Page 71389]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-25359]
[[Page 71389]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96335; File No. SR-CboeBZX-2022-043]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Withdrawal of a Proposed Rule Change To Amend Exchange Rule 14.11(d) To
Accommodate Exchange Listing and Trading of Options-Linked Securities
November 16, 2022.
On August 18, 2022, Cboe BZX Exchange, Inc. (``BZX'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend BZX Rule 14.11(d) to accommodate the
listing and trading of Options-Linked Securities.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
The proposed rule change was published for comment in the Federal
Register on September 8, 2022.\3\ On October 14, 2022, pursuant to
Section 19(b)(2) of the Act,\4\ the Commission designated a longer
period within which to approve the proposed rule change, disapprove the
proposed rule change, or institute proceedings to determine whether to
disapprove the proposed rule change.\5\ The Commission received no
comment letters on the proposed rule change.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 95655 (Sept. 1,
2022), 87 FR 55068.
\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 96077, 87 FR 63830
(Oct. 20, 2022).
---------------------------------------------------------------------------
On November 10, 2022, the Exchange withdrew the proposed rule
change (SR-CboeBZX-2022-043).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\6\
---------------------------------------------------------------------------
\6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-25359 Filed 11-21-22; 8:45 am]
BILLING CODE 8011-01-P
