82 FR 61611 - Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 21.5, Minimum Increments, To Extend the Penny Pilot Program

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 248 (December 28, 2017)

Page Range		61611-61612
FR Document		2017-27999
Federal Register, Volume 82 Issue 248 (Thursday, December 28, 2017)
[Federal Register Volume 82, Number 248 (Thursday, December 28, 2017)]
[Notices]
[Pages 61611-61612]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-27999]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82380; File No. SR-CboeEDGX-2017-007]


Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 
21.5, Minimum Increments, To Extend the Penny Pilot Program

December 21, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on December 14, 2017, Cboe EDGX Exchange, Inc. (the ``Exchange'' 
or ``EDGX'') filed with the Securities and Exchange Commission 
(``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 for the EDGX Options Market (``EDGX 
Options'') to extend through June 30, 2018, the Penny Pilot Program 
(``Penny Pilot'') in options classes in certain issues (``Pilot 
Program'') previously approved by the Commission.\5\
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    \5\ The rules of EDGX Options, including rules applicable to 
EDGX Options' participation in the Penny Pilot, were approved on 
August 7, 2015. See Securities Exchange Act Release No. 75650 
(August 7, 2015), 80 FR 48600 (August 13, 2015) (SR-EDGX-2015-18). 
EDGX Options commenced operations on November 2, 2015.
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    The text of the proposed rule change is available at the Exchange's 
website 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this filing is to extend the Penny Pilot, which was 
previously approved by the Commission, through June 30, 2018, and to 
provide revised dates for adding replacement issues to the Pilot 
Program. The Exchange proposes that any Pilot Program issues that have 
been delisted may be replaced on the second trading day following 
January 1, 2018. The replacement issues will be selected based on 
trading activity for the most recent six month period excluding the 
month immediately preceding the replacement (i.e., beginning June 1, 
2017, and ending November 30, 2017).
    The Exchange represents that the Exchange has the necessary system 
capacity to continue to support operation of the Penny Pilot. The 
Exchange believes the benefits to public customers and other market 
participants who will be able to express their true prices to buy and 
sell options have been demonstrated to outweigh the increase in quote 
traffic.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with the 
requirements of the Act and the rules and regulations thereunder that 
are applicable to a national securities exchange, and, in particular, 
with the requirements of Section 6(b) of the Act.\6\ In particular, the 
proposal is consistent with Section 6(b)(5) of the Act,\7\ because it 
would promote just and equitable principles of trade, remove 
impediments to, and perfect the mechanism of, a free and open market 
and a national market system. The Exchange believes that the Pilot

[[Page 61612]]

Program promotes just and equitable principles of trade by enabling 
public customers and other market participants to express their true 
prices to buy and sell options. Accordingly, the Exchange believes that 
the proposal is consistent with the Act because it will allow the 
Exchange to extend the Pilot Program prior to its expiration on June 
30, 2017. The Exchange notes that this proposal does not propose any 
new policies or provisions that are unique or unproven, but instead 
relates to the continuation of an existing program that operates on a 
pilot basis.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. In this regard, the Exchange 
notes that the rule change is being proposed in order to continue the 
Pilot Program, which is a competitive response to analogous programs 
offered by other options exchanges. The Exchange believes this proposed 
rule change is necessary to permit fair competition among the options 
exchanges.

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.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\ 
Because the 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 prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6)(iii) thereunder.
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    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 15 U.S.C. 78s(b)(3)(A).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after the date of the filing.\11\ 
However, pursuant to Rule 19b-4(f)(6)(iii),\12\ the Commission may 
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 believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest because doing so will 
allow the Pilot Program to continue without interruption in a manner 
that is consistent with the Commission's prior approval of the 
extension and expansion of the Pilot Program and will allow the 
Exchange and the Commission additional time to analyze the impact of 
the Pilot Program.\13\ Accordingly, the Commission designates the 
proposed rule change as operative upon filing with the Commission.\14\
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    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's 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. The 
Exchange has satisfied this pre-filing requirement.
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
    \13\ See Securities Exchange Act Release No. 61061 (November 24, 
2009), 74 FR 62857 (December 1, 2009) (SR-NYSEArca-2009-44). See 
also supra note 5.
    \14\ For purposes only of waiving the operative delay for this 
proposal, 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 under 
Section 19(b)(2)(B) \15\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \15\ 15 U.S.C. 78s(b)(2)(B).
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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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please 
include File Number SR-CboeEDGX-2017-007 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-CboeEDGX-2017-007. 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 (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 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-CboeEDGX-2017-007 and should be 
submitted on or before January 18, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-27999 Filed 12-27-17; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 82, No. 248 / Thursday, December 28, 2017 / Notices 61611

(B) institute proceedings to determine For the Commission, by the Division of II. Self-Regulatory Organization’s
whether the proposed rule change Trading and Markets, pursuant to delegated Statement of the Purpose of, and
should be disapproved. authority.35 Statutory Basis for, the Proposed Rule
Eduardo A. Aleman, Change
IV. Solicitation of Comments Assistant Secretary.
In its filing with the Commission, the
[FR Doc. 2017–27998 Filed 12–27–17; 8:45 am]
Interested persons are invited to Exchange included statements
BILLING CODE 8011–01–P
submit written data, views and concerning the purpose of and basis for
arguments concerning the foregoing, the proposed rule change and discussed
including whether the proposal is any comments it received on the
SECURITIES AND EXCHANGE
consistent with the Act. Comments may proposed rule change. The text of these
COMMISSION
be submitted by any of the following statements may be examined at the
methods: [Release No. 34–82380; File No. SR– places specified in Item IV below. The
CboeEDGX–2017–007] Exchange has prepared summaries, set
Electronic Comments forth in Sections A, B, and C below, of
Self-Regulatory Organizations; Cboe the most significant parts of such
• Use the Commission’s internet EDGX Exchange, Inc.; Notice of Filing
comment form (http://www.sec.gov/ statements.
and Immediate Effectiveness of a
rules/sro.shtml); or Proposed Rule Change to Rule 21.5, A. Self-Regulatory Organization’s
• Send an email to rule-comments@ Minimum Increments, To Extend the Statement of the Purpose of, and the
sec.gov. Please include File No. SR– Penny Pilot Program Statutory Basis for, the Proposed Rule
CboeBZX–2017–012 on the subject line. Change
December 21, 2017.
Paper Comments Pursuant to Section 19(b)(1) of the 1. Purpose
Securities Exchange Act of 1934 (the The purpose of this filing is to extend
• Send paper comments in triplicate ‘‘Act’’),1 and Rule 19b–4 thereunder,2 the Penny Pilot, which was previously
to Secretary, Securities and Exchange notice is hereby given that on December approved by the Commission, through
Commission, 100 F Street NE, 14, 2017, Cboe EDGX Exchange, Inc. June 30, 2018, and to provide revised
Washington, DC 20549–1090. (the ‘‘Exchange’’ or ‘‘EDGX’’) filed with dates for adding replacement issues to
the Securities and Exchange the Pilot Program. The Exchange
All submissions should refer to File No.
Commission (‘‘Commission’’) the proposes that any Pilot Program issues
SR–CboeBZX–2017–012. This file
proposed rule change as described in that have been delisted may be replaced
number should be included on the
Items I and II below, which Items have on the second trading day following
subject line if email is used. To help the been prepared by the Exchange. The
Commission process and review your January 1, 2018. The replacement issues
Exchange has designated this proposal will be selected based on trading
comments more efficiently, please use as a ‘‘non-controversial’’ proposed rule
only one method. The Commission will activity for the most recent six month
change pursuant to Section 19(b)(3)(A) period excluding the month
post all comments on the Commission’s of the Act 3 and Rule 19b–4(f)(6)(iii)
internet website (http://www.sec.gov/ immediately preceding the replacement
thereunder,4 which renders it effective (i.e., beginning June 1, 2017, and ending
rules/sro.shtml). Copies of the upon filing with the Commission. The
submission, all subsequent November 30, 2017).
Commission is publishing this notice to The Exchange represents that the
amendments, all written statements solicit comments on the proposed rule Exchange has the necessary system
with respect to the proposed rule change from interested persons. capacity to continue to support
change that are filed with the
I. Self-Regulatory Organization’s operation of the Penny Pilot. The
Commission, and all written
Statement of the Terms of Substance of Exchange believes the benefits to public
communications relating to the
the Proposed Rule Change customers and other market participants
proposed rule change between the
who will be able to express their true
Commission and any person, other than The Exchange filed a proposal for the
prices to buy and sell options have been
those that may be withheld from the EDGX Options Market (‘‘EDGX
demonstrated to outweigh the increase
public in accordance with the Options’’) to extend through June 30,
in quote traffic.
provisions of 5 U.S.C. 552, will be 2018, the Penny Pilot Program (‘‘Penny
available for website viewing and Pilot’’) in options classes in certain 2. Statutory Basis
printing in the Commission’s Public issues (‘‘Pilot Program’’) previously The Exchange believes that its
Reference Room, 100 F Street NE, approved by the Commission.5 proposal is consistent with the
Washington, DC 20549, on official The text of the proposed rule change requirements of the Act and the rules
business days between the hours of is available at the Exchange’s website at and regulations thereunder that are
10:00 a.m. and 3:00 p.m. Copies of such www.markets.cboe.com, at the principal applicable to a national securities
filing will also be available for office of the Exchange, and at the exchange, and, in particular, with the
inspection and copying at the principal Commission’s Public Reference Room. requirements of Section 6(b) of the Act.6
office of the Exchange. All comments In particular, the proposal is consistent
received will be posted without change. 35 17 CFR 200.30–3(a)(12).
with Section 6(b)(5) of the Act,7 because
1 15 U.S.C. 78s(b)(1).
Persons submitting comments are it would promote just and equitable
2 17 CFR 240.19b–4.
cautioned that we do not redact or edit
sradovich on DSK3GMQ082PROD with NOTICES

3 15 U.S.C. 78s(b)(3)(A). principles of trade, remove
personal identifying information from 4 17 CFR 240.19b–4(f)(6)(iii). impediments to, and perfect the
comment submissions. You should 5 The rules of EDGX Options, including rules mechanism of, a free and open market
submit only information that you wish applicable to EDGX Options’ participation in the and a national market system. The
to make available publicly. All Penny Pilot, were approved on August 7, 2015. See
Exchange believes that the Pilot
submissions should refer to File No. Securities Exchange Act Release No. 75650 (August
7, 2015), 80 FR 48600 (August 13, 2015) (SR–
SR–CboeBZX–2017–012 and should be EDGX–2015–18). EDGX Options commenced 6 15 U.S.C. 78f(b).
submitted on or before January 18, 2018. operations on November 2, 2015. 7 15 U.S.C. 78f(b)(5).

VerDate Sep<11>2014 18:14 Dec 27, 2017 Jkt 244001 PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 E:\FR\FM\28DEN1.SGM 28DEN1
61612 Federal Register / Vol. 82, No. 248 / Thursday, December 28, 2017 / Notices

Program promotes just and equitable A proposed rule change filed under Comments may be submitted by any of
principles of trade by enabling public Rule 19b–4(f)(6) normally does not the following methods:
customers and other market participants become operative prior to 30 days after
Electronic Comments
to express their true prices to buy and the date of the filing.11 However,
sell options. Accordingly, the Exchange pursuant to Rule 19b–4(f)(6)(iii),12 the • Use the Commission’s internet
believes that the proposal is consistent Commission may designate a shorter comment form (http://www.sec.gov/
with the Act because it will allow the time if such action is consistent with the rules/sro.shtml); or
Exchange to extend the Pilot Program protection of investors and the public • Send an email to rule-comments@
prior to its expiration on June 30, 2017. interest. The Exchange has asked the sec.gov. Please include File Number SR–
The Exchange notes that this proposal Commission to waive the 30-day CboeEDGX–2017–007 on the subject
does not propose any new policies or operative delay so that the proposal may line.
provisions that are unique or unproven, become operative immediately upon
but instead relates to the continuation of filing. The Commission believes that Paper Comments
an existing program that operates on a waiving the 30-day operative delay is • Send paper comments in triplicate
pilot basis. consistent with the protection of to Secretary, Securities and Exchange
investors and the public interest Commission, 100 F Street NE,
B. Self-Regulatory Organization’s
because doing so will allow the Pilot Washington, DC 20549–1090.
Statement on Burden on Competition
Program to continue without
interruption in a manner that is All submissions should refer to File
The Exchange does not believe that
consistent with the Commission’s prior Number SR–CboeEDGX–2017–007. This
the proposed rule change will impose
approval of the extension and expansion file number should be included on the
any burden on competition that is not
of the Pilot Program and will allow the subject line if email is used. To help the
necessary or appropriate in furtherance
Exchange and the Commission Commission process and review your
of the purposes of the Act. In this
additional time to analyze the impact of comments more efficiently, please use
regard, the Exchange notes that the rule
the Pilot Program.13 Accordingly, the only one method. The Commission will
change is being proposed in order to
Commission designates the proposed post all comments on the Commission’s
continue the Pilot Program, which is a
rule change as operative upon filing internet website (http://www.sec.gov/
competitive response to analogous
with the Commission.14 rules/sro.shtml). Copies of the
programs offered by other options
submission, all subsequent
exchanges. The Exchange believes this At any time within 60 days of the amendments, all written statements
proposed rule change is necessary to filing of the proposed rule change, the with respect to the proposed rule
permit fair competition among the Commission summarily may change that are filed with the
options exchanges. temporarily suspend such rule change if Commission, and all written
C. Self-Regulatory Organization’s it appears to the Commission that such communications relating to the
Statement on Comments on the action is necessary or appropriate in the proposed rule change between the
Proposed Rule Change Received From public interest, for the protection of Commission and any person, other than
Members, Participants or Others investors, or otherwise in furtherance of those that may be withheld from the
the purposes of the Act. If the public in accordance with the
The Exchange has not solicited, and Commission takes such action, the provisions of 5 U.S.C. 552, will be
does not intend to solicit, comments on Commission shall institute proceedings available for website viewing and
this proposed rule change. The under Section 19(b)(2)(B) 15 of the Act to printing in the Commission’s Public
Exchange has not received any written determine whether the proposed rule Reference Room, 100 F Street NE,
comments from members or other change should be approved or Washington, DC 20549, on official
interested parties. disapproved. business days between the hours of
III. Date of Effectiveness of the IV. Solicitation of Comments 10:00 a.m. and 3:00 p.m. Copies of the
Proposed Rule Change and Timing for filing also will be available for
Commission Action Interested persons are invited to inspection and copying at the principal
submit written data, views, and office of the Exchange. All comments
The Exchange has filed the proposed arguments concerning the foregoing, received will be posted without change.
rule change pursuant to Section including whether the proposed rule Persons submitting comments are
19(b)(3)(A)(iii) of the Act 8 and Rule change is consistent with the Act. cautioned that we do not redact or edit
19b–4(f)(6) thereunder.9 Because the personal identifying information from
proposed rule change does not: (i) 11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– comment submissions. You should
Significantly affect the protection of 4(f)(6)(iii) requires the Exchange to give the submit only information that you wish
investors or the public interest; (ii) Commission written notice of the Exchange’s intent
to make available publicly. All
impose any significant burden on to file the proposed rule change along with a brief
description and the text of the proposed rule submissions should refer to File
competition; and (iii) become operative change, at least five business days prior to the date Number SR–CboeEDGX–2017–007 and
prior to 30 days from the date on which of filing of the proposed rule change, or such should be submitted on or before
it was filed, or such shorter time as the shorter time as designated by the Commission. The
January 18, 2018.
Commission may designate if consistent Exchange has satisfied this pre-filing requirement.
with the protection of investors and the
12 17 CFR 240.19b–4(f)(6)(iii). For the Commission, by the Division of
13 See Securities Exchange Act Release No. 61061 Trading and Markets, pursuant to delegated
sradovich on DSK3GMQ082PROD with NOTICES

public interest, the proposed rule (November 24, 2009), 74 FR 62857 (December 1, authority.16
change has become effective pursuant to 2009) (SR–NYSEArca–2009–44). See also supra
Eduardo A. Aleman,
Section 19(b)(3)(A) of the Act 10 and note 5.
Rule 19b–4(f)(6)(iii) thereunder. 14 For purposes only of waiving the operative Assistant Secretary.
delay for this proposal, the Commission has [FR Doc. 2017–27999 Filed 12–27–17; 8:45 am]
considered the proposed rule’s impact on
8 15 U.S.C. 78s(b)(3)(A)(iii). BILLING CODE 8011–01–P
efficiency, competition, and capital formation. See
9 17 CFR 240.19b–4(f)(6). 15 U.S.C. 78c(f).
10 15 U.S.C. 78s(b)(3)(A). 15 15 U.S.C. 78s(b)(2)(B). 16 17 CFR 200.30–3(a)(12).

VerDate Sep<11>2014 18:14 Dec 27, 2017 Jkt 244001 PO 00000 Frm 00080 Fmt 4703 Sfmt 9990 E:\FR\FM\28DEN1.SGM 28DEN1
Document Created: 2017-12-28 00:44:11
Document Modified: 2017-12-28 00:44:11
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		82 FR 61611