Self-Regulatory Organizations; Cboe Futures Exchange, LLC; Notice of a Filing of a Proposed Rule Change To Update Regulatory Independence Policies, 18356-18358 [2023-06321]
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18356
Federal Register / Vol. 88, No. 59 / Tuesday, March 28, 2023 / Notices
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–CboeEDGX–2023–019 and
should be submitted on or before April
18, 2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–06323 Filed 3–27–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–97183; File No. SR–CFE–
2023–001]
Self-Regulatory Organizations; Cboe
Futures Exchange, LLC; Notice of a
Filing of a Proposed Rule Change To
Update Regulatory Independence
Policies
March 22, 2023.
lotter on DSK11XQN23PROD with NOTICES1
Pursuant to Section 19(b)(7) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
March 10, 2023 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 March 10,
2023.
I. Self-Regulatory Organization’s
Description of the Proposed Rule
Change
CFE is proposing to update CFE
Policy and Procedure XIII (Cboe Global
Markets, Inc. and Subsidiaries
Regulatory Independence Policy for
Regulatory Group Personnel) (‘‘P&P
XIII’’) and CFE Policy and Procedure
XIV (Cboe Global Markets, Inc. and
Subsidiaries Regulatory Independence
Policy for Non-Regulatory Group
Personnel) (‘‘P&P XIV’’) (collectively,
11 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(7).
2 7 U.S.C. 7a–2(c).
1 15
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‘‘Regulatory Independence Policies’’ or
‘‘Policies’’) of the Policies and
Procedures Section of the CFE
Rulebook.
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 as
Exhibit 4 to the filing but is not attached
to the publication of this notice.
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, Proposed Rule
Change
1. Purpose
CFE is a subsidiary of Cboe Global
Markets, Inc. (‘‘CGM’’). CGM, CFE, and
other U.S. trading venue subsidiaries of
CGM previously adopted the Regulatory
Independence Policies and make
updates to the Regulatory Independence
Policies from time to time. The
Regulatory Independence Policies are
incorporated into the Policies and
Procedures Section of the CFE Rulebook
in P&P XIII and P&P XIV.
The updates to the Regulatory
Independence Policies being made by
the proposed rule change include the
following:
The titles of the Regulatory
Independence Policies are proposed to
be updated. The title of the Regulatory
Independence Policy in P&P XIII is
proposed to be Cboe Global Markets,
Inc. and Subsidiaries Regulatory
Independence Policy for Cboe U.S.
Exchanges (Regulatory Group Personnel
Version) and the title of the Regulatory
Independence Policy in P&P XIV is
proposed to be Cboe Global Markets,
Inc. and Subsidiaries Regulatory
Independence Policy for Cboe U.S.
Exchanges (Non-Regulatory Group
Personnel Version). The titles of the
Regulatory Independence Policies are
proposed to be updated in order to
PO 00000
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reflect that the Policies are applicable to
Cboe U.S. Exchanges, as further
described in the following paragraph.
Similarly, the provisions of the
Regulatory Independence Policies are
proposed to be revised to make clear
that they apply to Cboe U.S. Exchanges.
Cboe U.S. Exchanges under the Policies
include Cboe Exchange, Inc., Cboe C2
Exchange, Inc., Cboe BZX Exchange,
Inc., Cboe BYX Exchange, Inc., Cboe
EDGA Exchange, Inc., Cboe EDGX
Exchange, Inc., CFE, Cboe Digital
Exchange, LLC (‘‘Cboe Digital’’), and
Cboe SEF, LLC (‘‘Cboe SEF’’). All of
these trading venues are currently
referenced in the Regulatory
Independence Policies with the
exception of Cboe Digital.
The Regulatory Independence Policies
are proposed to be updated to apply to
Cboe Digital. Cboe Digital is a
designated contract market (‘‘DCM’’)
registered with the CFTC that became a
subsidiary of CGM during 2022.
Each Regulatory Independence Policy
is proposed to be revised to specifically
refer to the other Regulatory
Independence Policy as a companion
version of that Regulatory Independence
Policy. This proposed change is
intended (i) to make clear to anyone
reviewing the Regulatory Independence
Policy applicable to Regulatory Group
personnel that there is a related
Regulatory Independence Policy with
similar provisions that applies to NonRegulatory Group personnel and (ii) to
make clear to anyone reviewing the
Regulatory Independence Policy
applicable to Non-Regulatory Group
personnel that there is a related
Regulatory Independence Policy with
similar provisions that applies to
Regulatory Group personnel.
The Regulatory Independence Policies
are proposed to be revised to update the
definition of the Regulatory Group
under the Policies to refer to those
employees supporting the regulatory
functions of the Cboe U.S. Exchanges
and to indicate that those employees
include (i) all regulatory employees in
the Regulatory Division for the Cboe
U.S. Exchanges; (ii) any employee of
any Cboe Company (as defined below)
who is performing services for the
Regulatory Group, including for
example, when providing such services,
Legal Division and Compliance
Department employees as well as
systems and database personnel who are
assigned to work on matters for the
Regulatory Group; and (iii) employees of
a regulatory services provider providing
regulatory services for a Cboe U.S.
Exchange pursuant to any Regulatory
Services Agreement (‘‘RSA’’). All other
employees of any Cboe Company are
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Federal Register / Vol. 88, No. 59 / Tuesday, March 28, 2023 / Notices
considered non-Regulatory Group
Personnel under the Policies.
The Regulatory Independence Policies
are proposed to be revised to add
references to Cboe Digital where
appropriate and to note regulatory
provisions that CFE, Cboe Digital, and
Cboe SEF are required to enforce and
how those obligations apply to each of
those entities. As proposed to be revised
in this respect, the Regulatory
Independence Polices would provide
that: Under the CEA, CFE, Cboe Digital,
and Cboe SEF are required to enforce
compliance by their trading privilege
holders and participants and their
related parties with the CEA, the
regulations of the CFTC, and, to the
extent applicable, that exchange’s rules,
certain rules of the Federal Reserve
Board (for CFE), certain rules of The
Options Clearing Corporation (for CFE)
or Cboe Clear Digital, LLC (for Cboe
Digital), and the Act, and rules and
regulations promulgated pursuant to the
SEA (for CFE). These proposed
additions of references to Cboe Digital
in the Regulatory Independence Policies
do not substantively change the
descriptions in the Policies of the
regulatory provisions that CFE is
required to enforce and how those
obligations apply to CFE.
The Regulatory Independence Policies
are proposed to be updated to define the
term Member under the Policies to
encompass a trading permit holder,
trading privilege holder, permit holder,
member, participant, or other person or
entity with trading privileges on a
market of a Cboe U.S. Exchange. The
Regulatory Independence Policies are
also proposed to be revised to utilize the
term Member in place of the term
trading permit holder since the term
Member is a broader term and captures
the various types of members on the
Cboe U.S. Exchanges.
The Regulatory Independence Policies
are proposed to be revised to
specifically note that the Cboe U.S.
Exchanges may enter into RSAs with
regulatory service providers.
The Regulatory Independence Policies
are proposed to be amended to reference
the Cboe U.S. Exchanges in various
provisions within the Policies instead
referencing a Cboe Company in
instances in which the applicable
provision is intended to refer more
specifically to the Cboe U.S. Exchanges
instead of to the broader term Cboe
Company. A Cboe Company includes
CGM, the Cboe U.S. Exchanges, and any
other subsidiary or affiliate of CGM. The
proposed rule change also includes
other proposed revisions which
reference both the Cboe U.S. Exchanges
and any other Cboe Company where the
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16:59 Mar 27, 2023
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applicable provision is meant to apply
to both. These proposed amendments
are proposed clarifying changes and are
not intended to alter the current
substantive provisions of the Regulatory
Independence Policies. Instead, they are
intended to use more precise
terminology and to further clarify which
entities various provisions are intended
to reference. For example, one of these
provisions currently reads: All
regulatory decisions shall be made
without regard to the actual or
perceived business interests of the Cboe
Companies or any of their trading
permit holders. As it is proposed to be
revised, this provision would read: All
regulatory decisions shall be made
without regard to the actual or
perceived business interests of the Cboe
U.S. Exchanges and any other Cboe
Companies or any of the Cboe U.S.
Exchange Members.
The Regulatory Independence Policies
are proposed to be revised to make clear
that regulatory matters under the
Policies include, among other things,
any regulatory investigation,
examination, inquiry, or complaint that
is being investigated or brought by the
CFTC.
The Regulatory Independence Policies
are proposed to be updated to refer to
the Regulatory Oversight Committees of
the Cboe U.S. Exchanges instead of to
Regulatory Oversight and Compliance
Committees, which was a name for
those committees that was previously
used by some of the Cboe U.S.
Exchanges.
The Regulatory Independence Policies
are proposed to be amended to provide
that regulatory matters may be
discussed with the CGM Risk
Committee in connection with its
oversight of CGM’s risk assessment and
risk management, including risks
related to Cboe U.S. Exchanges’
compliance with applicable laws,
regulations, and policies. Similarly, the
Regulatory Independence Policies are
proposed to be amended to provide that
the Chief Regulatory Officer of the
applicable Cboe U.S. Exchange will
have direct access to the CGM Risk
Committee Chair to discuss matters
related to oversight of CGM’s risk
assessment and risk management,
including risks related to Cboe U.S.
Exchanges’ compliance with applicable
laws, regulations, and policies. Similar
provisions currently apply with respect
to the CGM Board and CGM Audit
Committee and references to the CGM
Risk Committee and CGM Risk
Committee Chair are proposed to be
added to the Policies in this regard in
light of the role of the CGM Risk
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18357
Committee with regard to risk
assessment and risk management.
The Regulatory Independence Policies
are also proposed to be updated to
include various non-substantive and
technical revisions which do not affect
the content and substance of the
Policies. For example, the Securities
Exchange Act of 1934 is currently
referred to in the Regulatory
Independence Policies as the Securities
and Exchange Act of 1934 and is
currently defined in short form in the
Policies as the ‘‘Act’’. The Regulatory
Independence Policies are proposed to
be revised to correct the references to
that statute by removing the word ‘‘and’’
from within the current references to the
full name of that statute and by also
changing the defined term for that
statute within the Polices from the
‘‘Act’’ to the ‘‘SEA’’. As another
example, bullet point lists within the
Regulatory Independence Policies are
proposed to be revised so that each
bullet point within the lists starts with
a lower case word instead of a
capitalized word.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,3 in general, and
furthers the objectives of Sections
6(b)(1) 4 and 6(b)(5) 5 in particular, in
that it is designed:
• to enable the Exchange to enforce
compliance by its Trading Privilege
Holders and persons associated with its
Trading Privilege Holders with the
provisions of the rules of the Exchange,
• to prevent fraudulent and
manipulative acts and practices,
• to promote just and equitable
principles of trade,
• 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.
The proposed rule change retains the
current substantive provisions of the
Regulatory Independence Policies
within CFE’s rules while updating the
Policies to clarify that they apply to the
Cboe U.S. Exchanges, which now
includes Cboe Digital, and to make
clarifying updates to titles, terms,
definitions, and provisions within the
Policies where appropriate and
necessary. By retaining the current
substantive provisions of the Regulatory
Independence Policies within CFE’s
rules, the proposed rule change
3 15
U.S.C. 78f(b).
U.S.C. 78f(b)(1).
5 15 U.S.C. 78f(b)(5).
4 15
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Federal Register / Vol. 88, No. 59 / Tuesday, March 28, 2023 / Notices
contributes to minimizing conflicts of
interest in the decision-making process
of CFE and to the preservation of the
independence of the Exchange’s
Regulatory Group as it performs
regulatory functions for the Exchange.
The Exchange believes that the
proposed rule change is equitable and
not unfairly discriminatory in that the
Regulatory Independence Policies apply
equally in relation to all CFE Trading
Privilege Holders.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
CFE does not believe that the
proposed rule change will impose any
burden on competition not necessary or
appropriate in furtherance of the
purposes of the Act, in that the
proposed rule change contributes to
CFE’s ability to carry out its
responsibilities as a self-regulatory
organization. The Exchange believes
that the proposed rule change will not
impose any undue burden on
competition because the Regulatory
Independence Policies apply equally in
relation to all CFE Trading Privilege
Holders.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
lotter on DSK11XQN23PROD with NOTICES1
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The proposed rule change will
become operative on March 24, 2023. At
any time within 60 days of the date of
effectiveness of the proposed rule
change, the Commission, after
consultation with the CFTC, may
summarily abrogate the proposed rule
change and require that the proposed
rule change be refiled in accordance
with the provisions of Section 19(b)(1)
of the Act.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:
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CFE–2023–001 on the subject line.
Paper Comments
[SEC File No. 270–805, OMB Control No.
3235–0756]
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
Proposed Collection; Comment
Request; Extension: Rule 147(f)(1)(iii)
Written Representation as to
Purchaser Residency
All submissions should refer to File
Number SR–CFE–2023–001. 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–CFE–2023–001, and should
be submitted on or before April 18,
2023.
Upon Written Request Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the collection of information
summarized below. The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget for extension
and approval.
Rule 147 is a safe harbor under the
Securities Act Section 3(a)(11)(15 U.S.C.
77c(a)(11)) exemption from registration.
To qualify for the safe harbor, Rule
147(f)(1)(iii) (17 CFR 230.147) will
require the issuer to obtain from the
purchaser a written representation as to
the purchaser’s residency. Under Rule
147, the purchaser in the offering must
be a resident of the same state or
territory in which the issuer is a
resident. While the formal
representation of residency by itself is
not sufficient to establish a reasonable
belief that such purchasers are in-state
residents, the representation
requirement, together with the
reasonable belief standard, may result in
better compliance with the rule and
maintaining appropriate investor
protections. The representation of
residency is not provided to the
Commission. Approximately 700
respondents provide the information
required by Rule 147(f)(1)(iii) at an
estimated 2.75 hours per response for a
total annual reporting burden of 1,925
hours (2.75 hours × 700 responses).
Written comments are invited on: (a)
whether this proposed collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information will have practical utility;
(b) the accuracy of the agency’s estimate
of the burden imposed by the collection
of information; (c) ways to enhance the
quality, utility, and clarity of the
information collected; and (d) ways to
minimize the burden of the collection of
information on respondents, including
through the use of automated collection
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–06321 Filed 3–27–23; 8:45 am]
BILLING CODE 8011–01–P
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
6 15
U.S.C. 78s(b)(1).
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]]>Agencies
[Federal Register Volume 88, Number 59 (Tuesday, March 28, 2023)]
[Notices]
[Pages 18356-18358]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-06321]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-97183; File No. SR-CFE-2023-001]
Self-Regulatory Organizations; Cboe Futures Exchange, LLC; Notice
of a Filing of a Proposed Rule Change To Update Regulatory Independence
Policies
March 22, 2023.
Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on March 10, 2023 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
March 10, 2023.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(7).
\2\ 7 U.S.C. 7a-2(c).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Description of the Proposed Rule
Change
CFE is proposing to update CFE Policy and Procedure XIII (Cboe
Global Markets, Inc. and Subsidiaries Regulatory Independence Policy
for Regulatory Group Personnel) (``P&P XIII'') and CFE Policy and
Procedure XIV (Cboe Global Markets, Inc. and Subsidiaries Regulatory
Independence Policy for Non-Regulatory Group Personnel) (``P&P XIV'')
(collectively, ``Regulatory Independence Policies'' or ``Policies'') of
the Policies and Procedures Section of the CFE Rulebook.
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 as Exhibit 4 to the filing but is
not attached to the publication of this notice.
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, Proposed Rule Change
1. Purpose
CFE is a subsidiary of Cboe Global Markets, Inc. (``CGM''). CGM,
CFE, and other U.S. trading venue subsidiaries of CGM previously
adopted the Regulatory Independence Policies and make updates to the
Regulatory Independence Policies from time to time. The Regulatory
Independence Policies are incorporated into the Policies and Procedures
Section of the CFE Rulebook in P&P XIII and P&P XIV.
The updates to the Regulatory Independence Policies being made by
the proposed rule change include the following:
The titles of the Regulatory Independence Policies are proposed to
be updated. The title of the Regulatory Independence Policy in P&P XIII
is proposed to be Cboe Global Markets, Inc. and Subsidiaries Regulatory
Independence Policy for Cboe U.S. Exchanges (Regulatory Group Personnel
Version) and the title of the Regulatory Independence Policy in P&P XIV
is proposed to be Cboe Global Markets, Inc. and Subsidiaries Regulatory
Independence Policy for Cboe U.S. Exchanges (Non-Regulatory Group
Personnel Version). The titles of the Regulatory Independence Policies
are proposed to be updated in order to reflect that the Policies are
applicable to Cboe U.S. Exchanges, as further described in the
following paragraph.
Similarly, the provisions of the Regulatory Independence Policies
are proposed to be revised to make clear that they apply to Cboe U.S.
Exchanges. Cboe U.S. Exchanges under the Policies include Cboe
Exchange, Inc., Cboe C2 Exchange, Inc., Cboe BZX Exchange, Inc., Cboe
BYX Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc.,
CFE, Cboe Digital Exchange, LLC (``Cboe Digital''), and Cboe SEF, LLC
(``Cboe SEF''). All of these trading venues are currently referenced in
the Regulatory Independence Policies with the exception of Cboe
Digital.
The Regulatory Independence Policies are proposed to be updated to
apply to Cboe Digital. Cboe Digital is a designated contract market
(``DCM'') registered with the CFTC that became a subsidiary of CGM
during 2022.
Each Regulatory Independence Policy is proposed to be revised to
specifically refer to the other Regulatory Independence Policy as a
companion version of that Regulatory Independence Policy. This proposed
change is intended (i) to make clear to anyone reviewing the Regulatory
Independence Policy applicable to Regulatory Group personnel that there
is a related Regulatory Independence Policy with similar provisions
that applies to Non-Regulatory Group personnel and (ii) to make clear
to anyone reviewing the Regulatory Independence Policy applicable to
Non-Regulatory Group personnel that there is a related Regulatory
Independence Policy with similar provisions that applies to Regulatory
Group personnel.
The Regulatory Independence Policies are proposed to be revised to
update the definition of the Regulatory Group under the Policies to
refer to those employees supporting the regulatory functions of the
Cboe U.S. Exchanges and to indicate that those employees include (i)
all regulatory employees in the Regulatory Division for the Cboe U.S.
Exchanges; (ii) any employee of any Cboe Company (as defined below) who
is performing services for the Regulatory Group, including for example,
when providing such services, Legal Division and Compliance Department
employees as well as systems and database personnel who are assigned to
work on matters for the Regulatory Group; and (iii) employees of a
regulatory services provider providing regulatory services for a Cboe
U.S. Exchange pursuant to any Regulatory Services Agreement (``RSA'').
All other employees of any Cboe Company are
[[Page 18357]]
considered non-Regulatory Group Personnel under the Policies.
The Regulatory Independence Policies are proposed to be revised to
add references to Cboe Digital where appropriate and to note regulatory
provisions that CFE, Cboe Digital, and Cboe SEF are required to enforce
and how those obligations apply to each of those entities. As proposed
to be revised in this respect, the Regulatory Independence Polices
would provide that: Under the CEA, CFE, Cboe Digital, and Cboe SEF are
required to enforce compliance by their trading privilege holders and
participants and their related parties with the CEA, the regulations of
the CFTC, and, to the extent applicable, that exchange's rules, certain
rules of the Federal Reserve Board (for CFE), certain rules of The
Options Clearing Corporation (for CFE) or Cboe Clear Digital, LLC (for
Cboe Digital), and the Act, and rules and regulations promulgated
pursuant to the SEA (for CFE). These proposed additions of references
to Cboe Digital in the Regulatory Independence Policies do not
substantively change the descriptions in the Policies of the regulatory
provisions that CFE is required to enforce and how those obligations
apply to CFE.
The Regulatory Independence Policies are proposed to be updated to
define the term Member under the Policies to encompass a trading permit
holder, trading privilege holder, permit holder, member, participant,
or other person or entity with trading privileges on a market of a Cboe
U.S. Exchange. The Regulatory Independence Policies are also proposed
to be revised to utilize the term Member in place of the term trading
permit holder since the term Member is a broader term and captures the
various types of members on the Cboe U.S. Exchanges.
The Regulatory Independence Policies are proposed to be revised to
specifically note that the Cboe U.S. Exchanges may enter into RSAs with
regulatory service providers.
The Regulatory Independence Policies are proposed to be amended to
reference the Cboe U.S. Exchanges in various provisions within the
Policies instead referencing a Cboe Company in instances in which the
applicable provision is intended to refer more specifically to the Cboe
U.S. Exchanges instead of to the broader term Cboe Company. A Cboe
Company includes CGM, the Cboe U.S. Exchanges, and any other subsidiary
or affiliate of CGM. The proposed rule change also includes other
proposed revisions which reference both the Cboe U.S. Exchanges and any
other Cboe Company where the applicable provision is meant to apply to
both. These proposed amendments are proposed clarifying changes and are
not intended to alter the current substantive provisions of the
Regulatory Independence Policies. Instead, they are intended to use
more precise terminology and to further clarify which entities various
provisions are intended to reference. For example, one of these
provisions currently reads: All regulatory decisions shall be made
without regard to the actual or perceived business interests of the
Cboe Companies or any of their trading permit holders. As it is
proposed to be revised, this provision would read: All regulatory
decisions shall be made without regard to the actual or perceived
business interests of the Cboe U.S. Exchanges and any other Cboe
Companies or any of the Cboe U.S. Exchange Members.
The Regulatory Independence Policies are proposed to be revised to
make clear that regulatory matters under the Policies include, among
other things, any regulatory investigation, examination, inquiry, or
complaint that is being investigated or brought by the CFTC.
The Regulatory Independence Policies are proposed to be updated to
refer to the Regulatory Oversight Committees of the Cboe U.S. Exchanges
instead of to Regulatory Oversight and Compliance Committees, which was
a name for those committees that was previously used by some of the
Cboe U.S. Exchanges.
The Regulatory Independence Policies are proposed to be amended to
provide that regulatory matters may be discussed with the CGM Risk
Committee in connection with its oversight of CGM's risk assessment and
risk management, including risks related to Cboe U.S. Exchanges'
compliance with applicable laws, regulations, and policies. Similarly,
the Regulatory Independence Policies are proposed to be amended to
provide that the Chief Regulatory Officer of the applicable Cboe U.S.
Exchange will have direct access to the CGM Risk Committee Chair to
discuss matters related to oversight of CGM's risk assessment and risk
management, including risks related to Cboe U.S. Exchanges' compliance
with applicable laws, regulations, and policies. Similar provisions
currently apply with respect to the CGM Board and CGM Audit Committee
and references to the CGM Risk Committee and CGM Risk Committee Chair
are proposed to be added to the Policies in this regard in light of the
role of the CGM Risk Committee with regard to risk assessment and risk
management.
The Regulatory Independence Policies are also proposed to be
updated to include various non-substantive and technical revisions
which do not affect the content and substance of the Policies. For
example, the Securities Exchange Act of 1934 is currently referred to
in the Regulatory Independence Policies as the Securities and Exchange
Act of 1934 and is currently defined in short form in the Policies as
the ``Act''. The Regulatory Independence Policies are proposed to be
revised to correct the references to that statute by removing the word
``and'' from within the current references to the full name of that
statute and by also changing the defined term for that statute within
the Polices from the ``Act'' to the ``SEA''. As another example, bullet
point lists within the Regulatory Independence Policies are proposed to
be revised so that each bullet point within the lists starts with a
lower case word instead of a capitalized word.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\3\ in general, and furthers the
objectives of Sections 6(b)(1) \4\ and 6(b)(5) \5\ in particular, in
that it is designed:
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\3\ 15 U.S.C. 78f(b).
\4\ 15 U.S.C. 78f(b)(1).
\5\ 15 U.S.C. 78f(b)(5).
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to enable the Exchange to enforce compliance by its
Trading Privilege Holders and persons associated with its Trading
Privilege Holders with the provisions of the rules of the Exchange,
to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade,
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.
The proposed rule change retains the current substantive provisions
of the Regulatory Independence Policies within CFE's rules while
updating the Policies to clarify that they apply to the Cboe U.S.
Exchanges, which now includes Cboe Digital, and to make clarifying
updates to titles, terms, definitions, and provisions within the
Policies where appropriate and necessary. By retaining the current
substantive provisions of the Regulatory Independence Policies within
CFE's rules, the proposed rule change
[[Page 18358]]
contributes to minimizing conflicts of interest in the decision-making
process of CFE and to the preservation of the independence of the
Exchange's Regulatory Group as it performs regulatory functions for the
Exchange. The Exchange believes that the proposed rule change is
equitable and not unfairly discriminatory in that the Regulatory
Independence Policies apply equally in relation to all CFE Trading
Privilege Holders.
B. Self-Regulatory Organization's Statement on Burden on Competition
CFE does not believe that the proposed rule change will impose any
burden on competition not necessary or appropriate in furtherance of
the purposes of the Act, in that the proposed rule change contributes
to CFE's ability to carry out its responsibilities as a self-regulatory
organization. The Exchange believes that the proposed rule change will
not impose any undue burden on competition because the Regulatory
Independence Policies apply equally in relation to all CFE Trading
Privilege Holders.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The proposed rule change will become operative on March 24, 2023.
At any time within 60 days of the date of effectiveness of the proposed
rule change, the Commission, after consultation with the CFTC, may
summarily abrogate the proposed rule change and require that the
proposed rule change be refiled in accordance with the provisions of
Section 19(b)(1) of the Act.\6\
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\6\ 15 U.S.C. 78s(b)(1).
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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-CFE-2023-001 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-CFE-2023-001. 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-CFE-2023-001, and should be submitted on
or before April 18, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(73).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-06321 Filed 3-27-23; 8:45 am]
BILLING CODE 8011-01-P
