83 FR 18612 - Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Concerning the VIX Large Trade Discount Program
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 82 (April 27, 2018)
Federal Register Volume 83, Issue 82 (April 27, 2018)
| Page Range | 18612-18614 | |
| FR Document | 2018-08851 |
[Federal Register Volume 83, Number 82 (Friday, April 27, 2018)] [Notices] [Pages 18612-18614] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-08851] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83093; File No. SR-CBOE-2018-031] Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Concerning the VIX Large Trade Discount Program April 23, 2018. 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 April 16, 2018, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') filed with the Securities and Exchange Commission (the ``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the VIX Large Trade Discount program. The text of the proposed rule change is also available on the Exchange's website (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the Secretary, and at the Commission's Public Reference Room. [[Page 18613]] 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 aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend its Fees Schedule. Specifically, the Exchange proposes to amend its VIX Large Trade Discount Program. By way of background the Exchange provides a discount in the form of a cap on transaction fees for Market-Maker, Broker-Dealer, Non-Trading Permit Holder Market-Maker, Professional/Voluntary Professional and Joint Back-Office (i.e., ``M'', ``B'', ``N'', ``W'' and ``J'' origin codes) executions in VIX (the '' VIX Large Trade Discount''). Particularly, regular transaction fees are currently only charged for up to 250,000 VIX options contracts per order for Market-Makers, Broker-Dealers, Non- Trading Permit Holder Market-Makers, Professional/Voluntary Professionals and Joint Back-Offices.\3\ The Exchange proposes to amend the VIX Large Trade Discount Program to provide that regular transaction fees will only be charged for up to 175,000 VIX options contracts per order. The Exchange believes the proposed amendment will incentivize the sending of large VIX orders. The greater liquidity and trading volume that the proposed amended cap encourages would benefit all market participants trading VIX options. --------------------------------------------------------------------------- \3\ The discount applies to transaction fees only. Other fees, such as the Index License Surcharge, are not discounted. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the ``Act'') and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.\4\ Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \5\ requirements that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, 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 Exchange also believes the proposed rule change is consistent with Section 6(b)(4) of the Act,\6\ which provides that Exchange rules may provide for the equitable allocation of reasonable dues, fees, and other charges among its Trading Permit Holders. --------------------------------------------------------------------------- \4\ 15 U.S.C. 78f(b). \5\ 15 U.S.C. 78f(b)(5). \6\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- The Exchange believes that lowering the VIX Large Trade Discount cap is reasonable because Market-Makers, Broker-Dealers, Non-Trading Permit Holder Market-Makers, Professional/Voluntary Professionals and Joint Back-Offices participants (i.e., non-Customer, non-Firm market participants) will receive a further discount for very large trades that they would not otherwise receive, which promotes and encourages larger VIX executions on the Exchange. This change is equitable and not unfairly discriminatory because the amendment will apply to all non- Customer, non-Firm market participants whose large trades qualify for the discount in VIX. The Exchange notes that other VIX trading incentive programs already exist for Customer and Firm market participants.\7\ --------------------------------------------------------------------------- \7\ See Cboe Options Fees Schedule, Customer Large Trade Discount program and the Cboe Options Clearing Trading Permit Holder Proprietary Products Sliding Scale. --------------------------------------------------------------------------- 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 because, while the cap does not apply to Customers and Firms, other incentive programs already exist for those market participants with respect to VIX trading.\8\ Additionally, the proposed change is designed to encourage increased VIX options volume, which provides greater trading opportunities for all market participants. The Exchange believes that the proposed rule change will not cause an unnecessary burden on intermarket competition because VIX is only traded on Cboe Options. To the extent that the proposed changes make Cboe Options a more attractive marketplace for market participants at other exchanges, such market participants are welcome to become Cboe Options market participants. --------------------------------------------------------------------------- \8\ Id. --------------------------------------------------------------------------- C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act \9\ and paragraph (f) of Rule 19b-4 \10\ thereunder. 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 will institute proceedings to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78s(b)(3)(A). \10\ 17 CFR 240.19b-4(f). --------------------------------------------------------------------------- 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 CommentsUse 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-CBOE-2018-031 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-2018-031. 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 [[Page 18614]] 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-CBOE-2018-031 and should be submitted on or before May 18, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\11\ --------------------------------------------------------------------------- \11\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-08851 Filed 4-26-18; 8:45 am] BILLING CODE 8011-01-P
![18612 Federal Register / Vol. 83, No. 82 / Friday, April 27, 2018 / Notices
requirements; the proposed rule change designates the proposed rule change 10:00 a.m. and 3:00 p.m. Copies of the
merely change [sic] when they must operative upon filing.23 filing also will be available for
start to comply with them. At any time within 60 days of the inspection and copying at the principal
filing of the proposed rule change, the office of the Exchange. All comments
C. Self-Regulatory Organization’s Commission summarily may received will be posted without change.
Statement on Comments on the temporarily suspend such rule change if Persons submitting comments are
Proposed Rule Change Received From it appears to the Commission that such cautioned that we do not redact or edit
Members, Participants, or Others action is: (i) Necessary or appropriate in personal identifying information from
The Exchange neither solicited nor the public interest; (ii) for the protection comment submissions. You should
received comments on the proposed of investors; or (iii) otherwise in submit only information that you wish
rule change. furtherance of the purposes of the Act. to make available publicly. All
If the Commission takes such action, the submissions should refer to File
III. Date of Effectiveness of the Commission shall institute proceedings
Proposed Rule Change and Timing for Number SR–CBOE–2018–029, and
to determine whether the proposed rule should be submitted on or before May
Commission Action should be approved or disapproved. 18, 2018.
Because the foregoing proposed rule
IV. Solicitation of Comments For the Commission, by the Division of
change does not: (i) Significantly affect Trading and Markets, pursuant to delegated
the protection of investors or the public Interested persons are invited to
authority.24
interest; (ii) impose any significant submit written data, views, and
arguments concerning the foregoing, Eduardo A. Aleman,
burden on competition; and (iii) become
including whether the proposed rule Assistant Secretary.
operative for 30 days from the date on
which it was filed, or such shorter time change is consistent with the Act. [FR Doc. 2018–08848 Filed 4–26–18; 8:45 am]
as the Commission may designate, it has Comments may be submitted by any of BILLING CODE 8011–01–P
become effective pursuant to Section the following methods:
19(b)(3)(A)(iii) of the Act 20 and Electronic Comments SECURITIES AND EXCHANGE
subparagraph (f)(6) of Rule 19b–4
• Use the Commission’s internet COMMISSION
thereunder.21
comment form (http://www.sec.gov/
A proposed rule change filed under [Release No. 34–83093; File No. SR–CBOE–
rules/sro.shtml); or
Rule 19b–4(f)(6) normally does not • Send an email to rule-comments@ 2018–031]
become operative for 30 days after the sec.gov. Please include File Number SR–
date of the filing. However, Rule 19b– Self-Regulatory Organizations; Cboe
CBOE–2018–029 on the subject line.
4(f)(6)(iii) 22 permits the Commission to Exchange, Inc.; Notice of Filing and
designate a shorter time if such action Paper Comments Immediate Effectiveness of a Proposed
is consistent with the protection of • Send paper comments in triplicate Rule Change Concerning the VIX Large
investors and the public interest. In its to Secretary, Securities and Exchange Trade Discount Program
filing, Cboe Options requested that the Commission, 100 F Street NE, April 23, 2018.
Commission waive the 30-day operative Washington, DC 20549–1090.
delay. The Exchange represented that it Pursuant to Section 19(b)(1) of the
All submissions should refer to File Securities Exchange Act of 1934 (the
would like to migrate SPX options from Number SR–CBOE–2018–029. This file
the Hybrid 3.0 System to the Hybrid ‘‘Act’’),1 and Rule 19b–4 thereunder,2
number should be included on the notice is hereby given that on April 16,
Trading System on April 30, 2018. The subject line if email is used. To help the
Commission believes that waiver of the 2018, Cboe Exchange, Inc. (the
Commission process and review your ‘‘Exchange’’ or ‘‘Cboe Options’’) filed
30-day operative delay is consistent comments more efficiently, please use
with the protection of investors and the with the Securities and Exchange
only one method. The Commission will Commission (the ‘‘Commission’’) the
public interest because the proposal is post all comments on the Commission’s
designed to modify the Hybrid Trading proposed rule change as described in
internet website (http://www.sec.gov/ Items I, II, and III below, which Items
System rules to accommodate SPX rules/sro.shtml). Copies of the
options in a manner substantively have been prepared by the Exchange.
submission, all subsequent The Commission is publishing this
similar to how they currently are listed amendments, all written statements
and traded on Hybrid 3.0. In so doing, notice to solicit comments on the
with respect to the proposed rule proposed rule change from interested
the proposal permits the Exchange to change that are filed with the
migrate the one product currently persons.
Commission, and all written
trading on Hybrid 3.0 onto the system communications relating to the I. Self-Regulatory Organization’s
it uses for all other options, and to do proposed rule change between the Statement of the Terms of Substance of
so in a way that minimizes disruption Commission and any person, other than the Proposed Rule Change
for traders that currently trade SPX on those that may be withheld from the The Exchange proposes to amend the
Hybrid 3.0 without raising novel issues. public in accordance with the VIX Large Trade Discount program. The
Accordingly, the Commission waives provisions of 5 U.S.C. 552, will be text of the proposed rule change is also
the 30-day operative delay and available for website viewing and available on the Exchange’s website
printing in the Commission’s Public (http://www.cboe.com/AboutCBOE/
20 15 U.S.C. 78s(b)(3)(A)(iii). Reference Room, 100 F Street NE, CBOELegalRegulatoryHome.aspx), at
daltland on DSKBBV9HB2PROD with NOTICES
21 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
Washington, DC 20549, on official the Exchange’s Office of the Secretary,
the Commission written notice of its intent to file business days between the hours of and at the Commission’s Public
the proposed rule change at least five business days Reference Room.
prior to the date of filing of the proposed rule 23 For purposes only of waiving the 30-day
change, or such shorter time as designated by the operative delay, the Commission has also
24 17 CFR 200.30–3(a)(12) and (59).
Commission. The Exchange has satisfied this considered the proposed rule’s impact on
requirement. efficiency, competition, and capital formation. See 1 15 U.S.C. 78s(b)(1).
22 17 CFR 240.19b–4(f)(6)(iii). 15 U.S.C. 78c(f). 2 17 CFR 240.19b–4.
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![18614 Federal Register / Vol. 83, No. 82 / Friday, April 27, 2018 / Notices
only one method. The Commission will which Items have been prepared by the Current Registration Process
post all comments on the Commission’s Exchange. The Commission is Once a Member 5 has qualified as a
internet website (http://www.sec.gov/ publishing this notice to solicit Market Maker, such Market Maker may
rules/sro.shtml). Copies of the comments on the proposed rule change seek registration in individual series of
submission, all subsequent from interested persons. options pursuant to Rule 602.
amendments, all written statements Specifically, Rule 602(b) provides that
with respect to the proposed rule I. Self-Regulatory Organization’s
Statement of the Terms of Substance of ‘‘[a] Market Maker may become
change that are filed with the registered in a series by entering a
Commission, and all written the Proposed Rule Change
registration request via an Exchange
communications relating to the The Exchange is filing a proposal to approved electronic interface with the
proposed rule change between the amend MIAX PEARL Rule 602, Exchange’s Systems by 9:00 a.m. Eastern
Commission and any person, other than Continuing Market Maker Registration, Time. Registration shall become
those that may be withheld from the to modify the Market Maker 3 series effective on the day the registration
public in accordance with the registration process utilized by the request is entered.’’ 6
provisions of 5 U.S.C. 552, will be Exchange.
available for website viewing and The text of the proposed rule change Proposed Registration Process
printing in the Commission’s Public is available on the Exchange’s website at The Exchange proposes to amend
Reference Room, 100 F Street NE, http://www.miaxoptions.com/rule- MIAX PEARL Rule 602(b) to modify the
Washington, DC 20549 on official filings/pearl at MIAX PEARL’s principal process by which a Market Maker
business days between the hours of office, and at the Commission’s Public becomes registered in a series.
10:00 a.m. and 3:00 p.m. Copies of the Reference Room. Specifically, the Exchange proposes to
filing also will be available for amend the rule text to state that
inspection and copying at the principal II. Self-Regulatory Organization’s registration may be requested by either
office of the Exchange. All comments Statement of the Purpose of, and utilizing the currently approved MIAX
received will be posted without change. Statutory Basis for, the Proposed Rule Express Order (‘‘MEO’’) 7 interface,
Persons submitting comments are Change which requires series registration to be
cautioned that we do not redact or edit In its filing with the Commission, the submitted prior to 9:00 a.m. Eastern
personal identifying information from Exchange included statements Time of the current trading day, which
comment submissions. You should concerning the purpose of and basis for registration request shall be submitted
submit only information that you wish the proposed rule change and discussed for every requested trading day, or an
to make available publicly. All any comments it received on the additional Exchange approved
submissions should refer to File proposed rule change. The text of these electronic interface, which requires
Number SR–CBOE–2018–031 and statements may be examined at the series registration to be submitted prior
should be submitted on or before May places specified in Item IV below. The to 6:00 p.m. Eastern Time of the
18, 2018. Exchange has prepared summaries, set business day immediately preceding the
For the Commission, by the Division of forth in sections A, B, and C below, of next trading day, which registration
Trading and Markets, pursuant to delegated the most significant aspects of such request shall persist until it is
authority.11 statements. withdrawn. A Market Maker can
Eduardo A. Aleman, withdraw a registration request by
Assistant Secretary. A. Self-Regulatory Organization’s utilizing the same tool as it used to
[FR Doc. 2018–08851 Filed 4–26–18; 8:45 am]
Statement of the Purpose of, and submit such request.
BILLING CODE 8011–01–P
Statutory Basis for, the Proposed Rule The purpose of this proposed change
Change is to accommodate an additional
1. Purpose Exchange approved electronic interface
SECURITIES AND EXCHANGE that the Exchange intends to make
COMMISSION The Exchange proposes to amend available to Market Makers for series
MIAX PEARL Rule 602, Continuing registration, which additional electronic
[Release No. 34–83092; File No. SR– Market Maker Registration, to modify interface has a different submission
PEARL–2018–11]
the Market Maker series registration deadline than the existing approved
Self-Regulatory Organizations; MIAX process utilized by the Exchange. The electronic interface, and which
PEARL, LLC; Notice of Filing and Exchange believes this proposal would additional electronic interface allows
Immediate Effectiveness of a Proposed simplify and enhance the efficiency of the registration request to persist until a
Rule Change To Amend Rule 602, the Market Maker series registration new request is submitted (whereas the
Continuing Market Maker Registration process, for both Market Makers and the existing electronic interface does not
Exchange. Other option exchanges allow the registration request to
April 23, 2018. generally have comparable Market persist—it requires a Market Maker to
Pursuant to Section 19(b)(1) of the Maker series registration processes.4
Securities Exchange Act of 1934 (‘‘NYSE American’’), Rule 923NY (Appointment of
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 3 The term ‘‘Market Maker’’ or ‘‘MM’’ means a Market Makers).
5 The term ‘‘Member’’ means an individual or
notice is hereby given that on April 13, Member registered with the Exchange for the
purpose of making markets in options contracts organization that is registered with the Exchange
2018, MIAX PEARL, LLC (‘‘MIAX traded on the Exchange and that is vested with the pursuant to Chapter II of the Rules for purposes of
PEARL’’ or ‘‘Exchange’’) filed with the
daltland on DSKBBV9HB2PROD with NOTICES
rights and responsibilities specified in Chapter VI trading on the Exchange as an ‘‘Electronic Exchange
Securities and Exchange Commission of the Exchange rules. See Exchange Rule 100. Member’’ or ‘‘Market Maker.’’ Members are deemed
(‘‘Commission’’) a proposed rule change 4 See, e.g., Cboe BZX Exchange, Inc. (‘‘BZX ‘‘members’’ under the Exchange Act. See Exchange
Options’’) Rules 22.3(a), (b) (Market Maker Rule 100.
as described in Items I, II, and III below, 6 See Exchange Rule 602(b).
Registration); see also Nasdaq PHLX, LLC (‘‘Phlx’’)
Rule 3212(b) (Registration as a Market Maker); 7 The term ‘‘MEO Interface’’ means a binary order
11 17 CFR 200.30–3(a)(12). Nasdaq Options Market (‘‘NOM’’), Chapter VII interface used for submitting certain order types (as
1 15 U.S.C. 78s(b)(1). (Market Participants), Section 3(a), (b) (Continuing set forth in Rule 516) to the MIAX PEARL System.
2 17 CFR 240.19b–4. Market Maker Registration); NYSE American, LLC See Exchange Rule 100.
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Document Created: 2018-04-27 01:45:09
Document Modified: 2018-04-27 01:45:09
| 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 | 83 FR 18612 |
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