82 FR 50705 - Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Update Rule 21.1 To Adopt a New Time in Force Applicable to the Exchange's Equity Options Platform

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 210 (November 1, 2017)

[Federal Register Volume 82, Number 210 (Wednesday, November 1, 2017)]
[Notices]
[Pages 50705-50707]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-23732]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81950; File No. SR-BatsBZX-2017-71]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Update 
Rule 21.1 To Adopt a New Time in Force Applicable to the Exchange's 
Equity Options Platform

October 26, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on October 20, 2017, Cboe BZX Exchange, Inc. (the ``Exchange'') 
(formerly known as Bats BZX Exchange, Inc.) filed with the Securities 
and Exchange Commission

[[Page 50706]]

(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The Exchange 
has designated this proposal as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6)(iii) thereunder,\4\ which renders it effective upon filing with 
the Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to update Rule 21.1 to adopt a new 
Time in Force applicable to the Exchange's equity options platform 
(``BZX Options'').
    The text of the proposed rule change is available at the Exchange's 
Web site at www.markets.cboe.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 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 parts of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    In 2016, the Exchange and its affiliates Bats BYX Exchange, Inc. 
(now known as Cboe BYX Exchange, Inc.) (``BYX''), Bats EDGA Exchange, 
Inc. (now known as Cboe EDGA Exchange, Inc.) (``EDGA''), and Bats EDGX 
Exchange, Inc. (now known as Cboe EDGX Exchange, Inc.) (``EDGX'') 
received approval to affect a merger (the ``Merger'') of the Exchange's 
indirect parent company, Bats Global Markets, Inc. (``BGM''), with CBOE 
Holdings, Inc. (now known as Cboe Global Markets, Inc.) (``CBOE 
Holdings''), the direct parent of Chicago Board Options Exchange, 
Incorporated (now known as Cboe Exchange, Inc.) (``Cboe Options'') and 
C2 Options Exchange, Incorporated (now known as Cboe C2 Exchange, Inc.) 
(``C2 Options'', and together with the Exchange, BYX, EDGA, EDGX, and 
Cboe Options the ``Cboe Affiliated Exchanges'').\5\ The Cboe Affiliated 
Exchanges are working to align certain system functionality, retaining 
only intended differences between the Cboe Affiliated Exchanges, in the 
context of a technology migration. In the context of such migration, 
the Exchange is working to align its systems to offer certain features 
currently offered by Cboe Options and C2 Options as well as striving to 
maintain consistent technology with the options platform operated by 
EDGX (``EDGX Options''). Although the Exchange intentionally offers 
certain features that differ from those offered by its affiliates and 
will continue to do so, the Exchange believes that offering similar 
functionality to the extent practicable will reduce potential confusion 
for Users.
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    \5\ See Securities Exchange Act Release No. 79585 (December 16, 
2016), 81 FR 93988 (December 22, 2016) (SR-BatsBZX-2016-68; SR-
BatsBYX-2016-29; SR-BatsEDGA-2016-24; SR-BatsEDGX-2016-60).
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    The Exchange proposes to amend Exchange Rule 21.1, Definitions, to 
add a new Time in Force, namely the time in force of ``At the Open'' or 
``OPG''.
    As proposed, ``At the Open'' or ``OPG'' shall mean, for an order so 
designated, an order that shall only participate in the opening process 
on the Exchange. An OPG order not executed in the opening process will 
be cancelled. The Exchange's affiliate, EDGX Options, recently received 
approval of various rule changes, including the adoption of a Time in 
Force of OPG that is identical to the Exchange's proposed rule.\6\ The 
Exchange notes that other options exchanges also offer Times in Force 
that, similar to OPG, limit an order to participating in an exchange's 
opening process.\7\
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    \6\ See Securities Exchange Act Release No. 81891 (October 17, 
2017) (SR-Bats-EDGX-2017-29).
    \7\ See, e.g., C2 Rule 6.10(c)(7); ISE Rule 715(o).
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \8\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \9\ in particular, in that it is designed 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. 
In particular, consistent rules and functionality between the Exchange 
and its affiliated exchanges will reduce complexity and help avoid 
potential confusion by the Users of the Exchange that are also 
participants on other Cboe Affiliated Exchanges.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes the proposed amendment will reduce complexity 
and increase the understanding of the Exchange's operations for all 
Users of the Exchange. In particular, by offering the same Times in 
Force as EDGX Options, the Exchange will avoid confusion from market 
participants that participate on both the Exchange and EDGX Options. In 
turn, when Cboe Options and C2 Options are migrated to the same 
technology as that of the Exchange, Users of the Exchange and other 
Cboe Affiliated Exchanges will have access to similar functionality on 
all Cboe Affiliated Exchanges. As such, the proposed rule change would 
foster cooperation and coordination with persons engaged in 
facilitating transactions in securities and would remove impediments to 
and perfect the mechanism of a free and open market and a national 
market system.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange notes that the 
proposal will promote consistency between the Exchange and its 
affiliated exchanges, and is part of a larger technology integration 
that will ultimately reduce complexity for Users of the Exchange that 
are also participants on other Cboe Affiliated Exchanges. The Exchange 
does not believe that the proposed changes will have any direct impact 
on competition. Thus, the Exchange does not believe that the proposal 
creates any significant impact on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any written comments from members or other interested parties.

[[Page 50707]]

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 from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6) thereunder.\10\
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    \10\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the text of 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.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \11\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \12\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has asked the Commission to waive the 30-day operative delay so that 
the proposal may become operative immediately upon filing. The 
Commission notes that the proposed rule change is based on EDGX Rule 
21.1(f)(6) and is identical to such rule. Thus, the Commission believes 
that waiver of the operative delay is consistent with the protection of 
investors and the public because the proposal does not present any new 
or novel issues that have not been previously considered by the 
Commission. Therefore, the Commission hereby waives the 30-day 
operative delay and designates the proposal operative upon filing.\13\
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    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
    \13\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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 change 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-BatsBZX-2017-71 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-BatsBZX-2017-71. 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 Web site (http://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 Web site 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-BatsBZX-2017-71 and should 
be submitted on or before November 22, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-23732 Filed 10-31-17; 8:45 am]
 BILLING CODE 8011-01-P