Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To Amend Exchange Rule 5.33, Complex Orders, 42007-42009 [2024-10432]
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Federal Register / Vol. 89, No. 94 / Tuesday, May 14, 2024 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–10435 Filed 5–13–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100080; File No. SR–NYSE–
2023–36]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Designation of a Longer Period for
Commission Action on Proceedings To
Determine Whether To Approve or
Disapprove a Proposed Rule Change
Regarding Enhancements to Its DMM
Program
May 8, 2024.
On October 23, 2003, New York Stock
Exchange LLC (‘‘NYSE’’ 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 its Designated Market
Maker (‘‘DMM’’) program. The proposed
rule change was published for comment
in the Federal Register on November 13,
2023.3
On December 13, 2023, 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 On February 9,
2024, the Commission instituted
proceedings under section 19(b)(2)(B) of
the Act 6 to determine whether to
approve or disapprove the proposed
rule change.7
Section 19(b)(2) of the Act 8 provides
that, after initiating proceedings, the
Commission shall issue an order
approving or disapproving the proposed
10 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 98869
(November 6, 2023), 88 FR 77625 (November 13,
2023) (SR–NYSE–2023–36). Comments on the
proposed rule change are available at: https://
www.sec.gov/comments/sr-nyse-2023-36/
srnyse202336.htm.
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 99161
(December 13, 2023), 88 FR 87829 (December 19,
2023).
6 15 U.S.C. 78s(b)(2)(B).
7 See Securities Exchange Act Release No. 99511,
89 FR 11893 (Feb. 15, 2024).
8 15 U.S.C. 78s(b)(2).
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1 15
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rule change not later than 180 days after
the date of publication of notice of filing
of the proposed rule change. The
Commission may extend the period for
issuing an order approving or
disapproving the proposed rule change,
however, by not more than 60 days if
the Commission determines that a
longer period is appropriate and
publishes the reasons for such
determination. The proposed rule
change was published for comment in
the Federal Register on November 13,
2023.9 The 180th day after publication
of the proposed rule change is May 11,
2024. The Commission is extending the
time period for approving or
disapproving the proposed rule change
for an additional 60 days.
The Commission finds that it is
appropriate to designate a longer period
within which to issue an order
approving or disapproving the proposed
rule change so that it has sufficient time
to consider the proposed rule change
and the issues raised therein.
Accordingly, the Commission, pursuant
to Section 19(b)(2) of the Act,10
designates July 10, 2024, as the date by
which the Commission shall either
approve or disapprove the proposed
rule change (File No. SR–NYSE–2023–
36).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–10431 Filed 5–13–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100081; File No. SR–
CBOE–2024–015]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing of
Amendment No. 1 and Order Granting
Accelerated Approval of a Proposed
Rule Change, as Modified by
Amendment No. 1, To Amend
Exchange Rule 5.33, Complex Orders
May 8, 2024.
I. Introduction
On March 19, 2024, Cboe Exchange,
Inc. (‘‘Exchange’’ or ‘‘Cboe Options’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Exchange
9 See
supra note 3 and accompanying text.
U.S.C. 78s(b)(2).
11 17 CFR 200.30–3(a)(57).
10 15
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42007
Act’’) 1 and Rule 19b–4 thereunder,2 a
proposed rule change to amend the
definition of ‘‘complex strategy’’ in
Exchange Rule 5.33(a) to allow the
Exchange to create new complex
strategies. In addition, the proposal
amends Exchange Rule 5.33(b)(2) to
provide that, in a class in which the
Exchange determines that complex
orders with Capacity M or N are not
eligible for entry into the Complex
Order Book (‘‘COB’’), the Exchange may
determine that a complex order with
Capacity M or N may enter the COB in
complex strategies designated by the
Exchange.3 The proposed rule change
was published for comment in the
Federal Register on March 28, 2024.4
On April 4, 2024, the Exchange filed
Amendment No. 1 to the proposed rule
change.5 The Commission has received
no comment letters regarding the
proposal. The Commission is publishing
this notice to solicit comment on
Amendment No. 1 and is approving the
proposed rule change, as modified by
Amendment No. 1, on an accelerated
basis.
II. Description of the Proposed Rule
Change, as Modified by Amendment
No. 1
The definition of complex strategy in
Exchange Rule 5.33(a) provides that
new complex strategies may be created
as the result of the receipt of a complex
instrument creation request or the
receipt of a complex order for a complex
strategy that is not currently in the
Exchange’s system.6 The Exchange
proposes to revise this definition to also
allow the Exchange to create new
complex strategies. The Exchange states
that customers will continue to have the
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 The Exchange states that the origin code ‘‘M’’
represents Exchange Market-Makers, and the origin
code ‘‘N’’ represents market makers or specialists
on another exchange (‘‘away market makers’’). The
Exchange states that, currently, orders representing
any capacity, including M and N, are eligible for
entry and may rest on the COB in all classes except
S&P 500 Index (‘‘SPX’’) and Cboe Volatility Index
(‘‘VIX’’) options. In SPX and VIX options, M and N
complex orders are not eligible for entry into the
COB except as set forth in Exchange Rule 5.33(b)(2).
See Securities Exchange Act Release No. 99838
(March 22, 2024), 89 FR 21548, 21549, n.3 (March
28, 2024) (‘‘Notice’’) and Amendment No. 1.
4 See Notice, supra note 3.
5 Amendment No. 1 revises the proposal to
correct descriptions of the current complex book
process by stating that Market-Makers and away
market makers currently are not permitted to enter
orders in VIX options, as well as SPX options, in
the COB. Amendment No. 1 makes no changes to
Exhibit 5 of the proposal. Amendment No. 1 is
available on the Commission’s website at https://
www.sec.gov/comments/sr-cboe-2024-015/
srcboe2024015.htm.
6 See Cboe Rule 5.33(a).
2 17
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Federal Register / Vol. 89, No. 94 / Tuesday, May 14, 2024 / Notices
ability to create complex instruments as
they do today.7
Exchange Rule 5.33(b)(2) states, in
part, that the Exchange determines
which Capacities are eligible for entry
into the COB.8 The Exchange states that,
currently, orders entered with any
Capacity, including Market-Maker and
away market-maker orders, are eligible
for entry and may rest on the COB in all
classes except SPX and VIX.9 In SPX
and VIX options, Market-Maker and
away market maker complex orders are
not eligible for entry into the COB
except as set forth in Exchange Rule
5.33(b)(2)(A).10 The Exchange proposes
to amend Exchange Rule 5.33(b)(2) to
provides that in a class in which the
Exchange determines that orders with
Capacity M or N are not eligible for
entry into the COB, the Exchange may
determine that a complex order with
Capacity M or N may enter the COB in
complex strategies designated by the
Exchange. The Exchange will have the
ability to designate strategies created by
the Exchange and by users for the entry
of Market-Maker and away market
maker orders in the COB.11
When determining which complex
strategies to create and in which
complex strategies the orders of MarketMakers and away market makers will be
eligible for COB entry, the Exchange
represents that it intends to make such
determinations based on objective,
nondiscriminatory factors, including
strategy type, orders, and executions
within a strategy type using close by
strikes, and market participant
feedback.12
7 See
Notice, 89 FR at 21550.
means the capacity in which a User
submits an order, which the User specifies by
applying the corresponding code to the order. See
Cboe Rule 1.1.
9 See Amendment No. 1.
10 See id. Exchange Rule 5.33(b)(2)(A) provides
that ‘‘In a class in which the Exchange determines
complex orders with Capacity M or N are not
eligible for entry into the COB, the Exchange may
determine that a complex order with Capacity M or
N may enter the COB if: (i) the complex order is
on the opposite side of (a) a Priority Customer
complex order(s) resting in the COB with a price
not outside the SNBBO; or (b) orders on the same
side of the market in the same complex strategy that
initiated a COA(s) if there are ‘‘x’’ number of COAs
within ‘‘y’’ milliseconds, counted on a rolling basis
(the Exchange determines the number ‘‘x’’ (which
must be at least two) and the time period ‘‘y’’
(which may be no more than 2,000); and (ii) the
User cancels the complex order, if it remains
unexecuted, no later than a specified time (which
the Exchange determines and may be no more than
five minutes) after the time the COB receives the M
or N complex order.’’
11 See Notice, 89 FR at 21550.
12 See id. at 21552.
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III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule change, as
modified by Amendment No. 1, is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange.13 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,14 which requires,
among other things, that the rules of a
national securities exchange be
designed 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, and
not be designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
The proposal will allow the Exchange
to create complex strategies and to
determine, in classes for which the
Exchange has determined that the
orders of Market-Makers and away
market makers may not rest in the COB,
that the orders of Market-Makers and
away market makers may rest in the
COB in complex strategies designated
by the Exchange. As described more
fully in the Notice, the Exchange states
that it understands from market
participants that electronic trading in
complex strategies may be limited for a
variety of reasons, including the
fragmentation of liquidity across
multiple customer-created complex
instruments expressing a similar
exposure profile.15 The Exchange states
that allowing it to create complex
strategies, and to designate complex
strategies in which the orders of MarketMakers and away market makers are
eligible for entry in the COB, would
permit the consolidation of liquidity in
a single complex strategy that currently
is spread across multiple customercreated complex instruments expressing
the same or similar exposure profiles.16
The Exchange further states that the
proposal to allow the Exchange to create
complex strategies could aggregate
liquidity seeking a particular level of
risk exposure in a single set of strikes
for a complex strategy (as opposed to
13 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
14 15 U.S.C. 78f(b)(5).
15 See Notice, 89 FR at 21549.
16 See Notice, 89 FR at 21459, 21550.
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Frm 00084
Fmt 4703
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across many varying strikes).17
According to the Exchange, the
consolidation of liquidity resulting from
the proposed changes could increase
execution opportunities at more
competitive prices.18 The Commission
believes that consolidating liquidity in
particular complex strategies, including
commonly traded strategies, could
increase price competition in these
strategies, potentially resulting in more
favorable executions for investors. The
Exchange represents that it will
determine the complex strategies to
create and the complex strategies in in
which the orders of Market-Makers and
away market makers will be eligible for
COB entry based on objective and
nondiscriminatory factors, including the
strategy type, orders, and executions
within a strategy type using close by
strikes, and market participant
feedback.19 In addition, the Exchange
states that customers will continue to
have the ability to create complex
instruments as they do today.20
IV. Solicitation of Comments on
Amendment No. 1 to the Proposed Rule
Change
Interested persons are invited to
submit written data, views, and
arguments concerning whether
Amendment No. 1 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–2024–015 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–2024–015. 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
17 See
Notice, 89 FR at 21550.
id.
19 See Notice, 89 FR at 21552.
20 See id. at 21550. See also Exchange Rule
5.33(a) (definition of complex strategy).
18 See
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Federal Register / Vol. 89, No. 94 / Tuesday, May 14, 2024 / Notices
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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–CBOE–2024–015 and should be
submitted on or before June 4, 2024.
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V. Accelerated Approval of Proposed
Rule Change, as Modified by
Amendment No. 1
The Commission finds good cause to
approve the proposed rule change, as
modified by Amendment No. 1, prior to
the thirtieth day after the date of
publication of notice of the filing of
Amendment No. 1 in the Federal
Register. The proposal, as originally
filed, stated that SPX is the only option
class for which the Exchange has
determined that the orders of MarketMakers and away market makers are not
eligible for entry in the COB.21
Amendment No. 1 revises the proposal
to indicate that the Exchange has
determined that the orders of MarketMakers and away market makers in VIX
options, as well as SPX options, are not
eligible for entry in the COB.
Amendment No. 1 does not modify the
rule text or the operation of the
proposed rules; rather it corrects an
erroneous factual statement regarding
the option classes for which the
Exchange has determined that the
orders of Market-Makers and away
market makers are not eligible to rest in
the COB. Accordingly, the Commission
finds good cause, pursuant to Section
19(b)(2) of the Act,22 to approve the
proposed rule change, as modified by
Amendment No. 1, on an accelerated
basis.
Notice, 89 FR at 21549, n.3 and n.4.
U.S.C. 78s(b)(2).
VI. Conclusion
It is therefore ordered, pursuant to
section 19(b)(2) of the Act,23 that the
proposed rule change (SR–CBOE–2024–
015), as modified by Amendment No. 1,
is approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–10432 Filed 5–13–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
35190; 812–15547]
John Hancock Multi Asset Credit Fund,
et al.
May 9, 2024.
Securities and Exchange
Commission (‘‘Commission’’ or ‘‘SEC’’).
ACTION: Notice.
AGENCY:
Notice of an application under section
6(c) of the Investment Company Act of
1940 (the ‘‘Act’’) for an exemption from
sections 18(a)(2), 18(c) and 18(i) of the
Act, under sections 6(c) and 23(c) of the
Act for an exemption from rule 23c–3
under the Act, and for an order pursuant
to section 17(d) of the Act and rule 17d–
1 under the Act.
Summary of Application: Applicants
request an order to permit certain
registered closed-end investment
companies to issue multiple classes of
shares and to impose asset-based
distribution and/or service fees and
early withdrawal charges.
Applicants: John Hancock Multi Asset
Credit Fund, John Hancock Asset-Based
Lending Fund, Manulife Private Credit
Plus Fund and John Hancock
Investment Management LLC.
Filing Dates: The application was
filed on February 1, 2024 and amended
on April 11, 2024, April 30, 2024 and
May 8, 2024.
Hearing or Notification of Hearing: An
order granting the requested relief will
be issued unless the Commission orders
a hearing. Interested persons may
request a hearing on any application by
emailing the SEC’s Secretary at
Secretarys-Office@sec.gov and serving
the Applicants with a copy of the
request by email, if an email address is
listed for the relevant Applicant below,
or personally or by mail, if a physical
address is listed for the relevant
21 See
23 15
22 15
24 17
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17:01 May 13, 2024
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U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
Frm 00085
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42009
Applicant below. Hearing requests
should be received by the Commission
by 5:30 p.m. on June 3, 2024, and
should be accompanied by proof of
service on the Applicants, in the form
of an affidavit, or, for lawyers, a
certificate of service. Pursuant to rule 0–
5 under the Act, hearing requests should
state the nature of the writer’s interest,
any facts bearing upon the desirability
of a hearing on the matter, the reason for
the request, and the issues contested.
Persons who wish to be notified of a
hearing may request notification by
emailing the Commission’s Secretary.
ADDRESSES: The Commission:
Secretarys-Office@sec.gov. Applicants:
Christopher Sechler, Esq., CSechler@
jhancock.com, with a copy to Mark P.
Goshko, K&L Gates, LLP, Mark.Goshko@
klgates.com, and Pablo J Man, K&L
Gates, LLP, Pablo.Man@klgates.com.
FOR FURTHER INFORMATION CONTACT:
Trace W. Rakestraw, Senior Special
Counsel, at (202) 551–6825 (Division of
Investment Management, Chief
Counsel’s Office).
SUPPLEMENTARY INFORMATION: For
Applicants’ representations, legal
analysis, and conditions, please refer to
Applicants’ application, dated May 8,
2024, which may be obtained via the
Commission’s website by searching for
the file number at the top of this
document, or for an Applicant using the
Company name search field on the
SEC’s EDGAR system. The SEC’s
EDGAR system may be searched at
https://www.sec.gov/edgar/searchedgar/
legacy/companysearch.html. You may
also call the SEC’s Public Reference
Room at (202) 551–8090.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–10506 Filed 5–13–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
35189; File No. 812–15535]
Monachil Credit Income Fund, et al.
May 8, 2024.
Securities and Exchange
Commission (‘‘Commission’’ or ‘‘SEC’’).
ACTION: Notice.
AGENCY:
Notice of application for an order
(‘‘Order’’) under sections 17(d) and 57(i)
of the Investment Company Act of 1940
(the ‘‘Act’’) and rule 17d–1 under the
Act to permit certain joint transactions
E:\FR\FM\14MYN1.SGM
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]]>Agencies
[Federal Register Volume 89, Number 94 (Tuesday, May 14, 2024)]
[Notices]
[Pages 42007-42009]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-10432]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100081; File No. SR-CBOE-2024-015]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing of Amendment No. 1 and Order Granting Accelerated Approval of a
Proposed Rule Change, as Modified by Amendment No. 1, To Amend Exchange
Rule 5.33, Complex Orders
May 8, 2024.
I. Introduction
On March 19, 2024, Cboe Exchange, Inc. (``Exchange'' or ``Cboe
Options'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to section 19(b)(1) of the Securities
Exchange Act of 1934 (``Exchange Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to amend the definition of
``complex strategy'' in Exchange Rule 5.33(a) to allow the Exchange to
create new complex strategies. In addition, the proposal amends
Exchange Rule 5.33(b)(2) to provide that, in a class in which the
Exchange determines that complex orders with Capacity M or N are not
eligible for entry into the Complex Order Book (``COB''), the Exchange
may determine that a complex order with Capacity M or N may enter the
COB in complex strategies designated by the Exchange.\3\ The proposed
rule change was published for comment in the Federal Register on March
28, 2024.\4\ On April 4, 2024, the Exchange filed Amendment No. 1 to
the proposed rule change.\5\ The Commission has received no comment
letters regarding the proposal. The Commission is publishing this
notice to solicit comment on Amendment No. 1 and is approving the
proposed rule change, as modified by Amendment No. 1, on an accelerated
basis.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ The Exchange states that the origin code ``M'' represents
Exchange Market-Makers, and the origin code ``N'' represents market
makers or specialists on another exchange (``away market makers'').
The Exchange states that, currently, orders representing any
capacity, including M and N, are eligible for entry and may rest on
the COB in all classes except S&P 500 Index (``SPX'') and Cboe
Volatility Index (``VIX'') options. In SPX and VIX options, M and N
complex orders are not eligible for entry into the COB except as set
forth in Exchange Rule 5.33(b)(2). See Securities Exchange Act
Release No. 99838 (March 22, 2024), 89 FR 21548, 21549, n.3 (March
28, 2024) (``Notice'') and Amendment No. 1.
\4\ See Notice, supra note 3.
\5\ Amendment No. 1 revises the proposal to correct descriptions
of the current complex book process by stating that Market-Makers
and away market makers currently are not permitted to enter orders
in VIX options, as well as SPX options, in the COB. Amendment No. 1
makes no changes to Exhibit 5 of the proposal. Amendment No. 1 is
available on the Commission's website at https://www.sec.gov/comments/sr-cboe-2024-015/srcboe2024015.htm.
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change, as Modified by Amendment
No. 1
The definition of complex strategy in Exchange Rule 5.33(a)
provides that new complex strategies may be created as the result of
the receipt of a complex instrument creation request or the receipt of
a complex order for a complex strategy that is not currently in the
Exchange's system.\6\ The Exchange proposes to revise this definition
to also allow the Exchange to create new complex strategies. The
Exchange states that customers will continue to have the
[[Page 42008]]
ability to create complex instruments as they do today.\7\
---------------------------------------------------------------------------
\6\ See Cboe Rule 5.33(a).
\7\ See Notice, 89 FR at 21550.
---------------------------------------------------------------------------
Exchange Rule 5.33(b)(2) states, in part, that the Exchange
determines which Capacities are eligible for entry into the COB.\8\ The
Exchange states that, currently, orders entered with any Capacity,
including Market-Maker and away market-maker orders, are eligible for
entry and may rest on the COB in all classes except SPX and VIX.\9\ In
SPX and VIX options, Market-Maker and away market maker complex orders
are not eligible for entry into the COB except as set forth in Exchange
Rule 5.33(b)(2)(A).\10\ The Exchange proposes to amend Exchange Rule
5.33(b)(2) to provides that in a class in which the Exchange determines
that orders with Capacity M or N are not eligible for entry into the
COB, the Exchange may determine that a complex order with Capacity M or
N may enter the COB in complex strategies designated by the Exchange.
The Exchange will have the ability to designate strategies created by
the Exchange and by users for the entry of Market-Maker and away market
maker orders in the COB.\11\
---------------------------------------------------------------------------
\8\ ``Capacity'' means the capacity in which a User submits an
order, which the User specifies by applying the corresponding code
to the order. See Cboe Rule 1.1.
\9\ See Amendment No. 1.
\10\ See id. Exchange Rule 5.33(b)(2)(A) provides that ``In a
class in which the Exchange determines complex orders with Capacity
M or N are not eligible for entry into the COB, the Exchange may
determine that a complex order with Capacity M or N may enter the
COB if: (i) the complex order is on the opposite side of (a) a
Priority Customer complex order(s) resting in the COB with a price
not outside the SNBBO; or (b) orders on the same side of the market
in the same complex strategy that initiated a COA(s) if there are
``x'' number of COAs within ``y'' milliseconds, counted on a rolling
basis (the Exchange determines the number ``x'' (which must be at
least two) and the time period ``y'' (which may be no more than
2,000); and (ii) the User cancels the complex order, if it remains
unexecuted, no later than a specified time (which the Exchange
determines and may be no more than five minutes) after the time the
COB receives the M or N complex order.''
\11\ See Notice, 89 FR at 21550.
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When determining which complex strategies to create and in which
complex strategies the orders of Market-Makers and away market makers
will be eligible for COB entry, the Exchange represents that it intends
to make such determinations based on objective, nondiscriminatory
factors, including strategy type, orders, and executions within a
strategy type using close by strikes, and market participant
feedback.\12\
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\12\ See id. at 21552.
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III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change, as modified by Amendment No. 1, is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange.\13\ In particular, the
Commission finds that the proposed rule change is consistent with
Section 6(b)(5) of the Act,\14\ which requires, among other things,
that the rules of a national securities exchange be designed 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, and not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\13\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\14\ 15 U.S.C. 78f(b)(5).
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The proposal will allow the Exchange to create complex strategies
and to determine, in classes for which the Exchange has determined that
the orders of Market-Makers and away market makers may not rest in the
COB, that the orders of Market-Makers and away market makers may rest
in the COB in complex strategies designated by the Exchange. As
described more fully in the Notice, the Exchange states that it
understands from market participants that electronic trading in complex
strategies may be limited for a variety of reasons, including the
fragmentation of liquidity across multiple customer-created complex
instruments expressing a similar exposure profile.\15\ The Exchange
states that allowing it to create complex strategies, and to designate
complex strategies in which the orders of Market-Makers and away market
makers are eligible for entry in the COB, would permit the
consolidation of liquidity in a single complex strategy that currently
is spread across multiple customer-created complex instruments
expressing the same or similar exposure profiles.\16\ The Exchange
further states that the proposal to allow the Exchange to create
complex strategies could aggregate liquidity seeking a particular level
of risk exposure in a single set of strikes for a complex strategy (as
opposed to across many varying strikes).\17\ According to the Exchange,
the consolidation of liquidity resulting from the proposed changes
could increase execution opportunities at more competitive prices.\18\
The Commission believes that consolidating liquidity in particular
complex strategies, including commonly traded strategies, could
increase price competition in these strategies, potentially resulting
in more favorable executions for investors. The Exchange represents
that it will determine the complex strategies to create and the complex
strategies in in which the orders of Market-Makers and away market
makers will be eligible for COB entry based on objective and
nondiscriminatory factors, including the strategy type, orders, and
executions within a strategy type using close by strikes, and market
participant feedback.\19\ In addition, the Exchange states that
customers will continue to have the ability to create complex
instruments as they do today.\20\
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\15\ See Notice, 89 FR at 21549.
\16\ See Notice, 89 FR at 21459, 21550.
\17\ See Notice, 89 FR at 21550.
\18\ See id.
\19\ See Notice, 89 FR at 21552.
\20\ See id. at 21550. See also Exchange Rule 5.33(a)
(definition of complex strategy).
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IV. Solicitation of Comments on Amendment No. 1 to the Proposed Rule
Change
Interested persons are invited to submit written data, views, and
arguments concerning whether Amendment No. 1 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-2024-015 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-2024-015. 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
[[Page 42009]]
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 a.m. and 3 p.m. Copies of the
filing also will be available for inspection and copying at the
principal office of the Exchange. Do not include personal identifiable
information in submissions; you should submit only information that you
wish to make available publicly. We may redact in part or withhold
entirely from publication submitted material that is obscene or subject
to copyright protection. All submissions should refer to file number
SR-CBOE-2024-015 and should be submitted on or before June 4, 2024.
V. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment No. 1
The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 1, prior to the thirtieth day
after the date of publication of notice of the filing of Amendment No.
1 in the Federal Register. The proposal, as originally filed, stated
that SPX is the only option class for which the Exchange has determined
that the orders of Market-Makers and away market makers are not
eligible for entry in the COB.\21\ Amendment No. 1 revises the proposal
to indicate that the Exchange has determined that the orders of Market-
Makers and away market makers in VIX options, as well as SPX options,
are not eligible for entry in the COB. Amendment No. 1 does not modify
the rule text or the operation of the proposed rules; rather it
corrects an erroneous factual statement regarding the option classes
for which the Exchange has determined that the orders of Market-Makers
and away market makers are not eligible to rest in the COB.
Accordingly, the Commission finds good cause, pursuant to Section
19(b)(2) of the Act,\22\ to approve the proposed rule change, as
modified by Amendment No. 1, on an accelerated basis.
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\21\ See Notice, 89 FR at 21549, n.3 and n.4.
\22\ 15 U.S.C. 78s(b)(2).
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VI. Conclusion
It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\23\ that the proposed rule change (SR-CBOE-2024-015), as modified
by Amendment No. 1, is approved.
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\23\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
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\24\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-10432 Filed 5-13-24; 8:45 am]
BILLING CODE 8011-01-P
