83 FR 23007 - Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Marketing Fee Program With Respect to the Russell 2000 Index Options

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 96 (May 17, 2018)

Page Range		23007-23008
FR Document		2018-10503

Federal Register, Volume 83 Issue 96 (Thursday, May 17, 2018)

[Federal Register Volume 83, Number 96 (Thursday, May 17, 2018)]
[Notices]
[Pages 23007-23008]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2018-10503]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83220; File No. SR-CBOE-2018-034]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
the Marketing Fee Program With Respect to the Russell 2000 Index
Options

May 11, 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 May 1, 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

The Exchange proposes to amend its marketing fee program with
respect to the fee assessed on Russell 2000 Index (``RUT'') options.
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.

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 marketing fee program with
respect to the fee assessed on Russell 2000 Index (``RUT'') options.
Currently, the Exchange assesses the marketing fee on RUT options at a
rate of $0.30 per contract. The Exchange no longer wishes to assess the
marketing fee to RUT options. The Exchange notes that the marketing fee
is similarly not applied to other Underlying Symbol List A products,
which group includes RUT. The Exchange believes removing the marketing
fee will encourage greater liquidity in RUT, which benefits all market
participants.
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.\3\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \4\ 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,

[[Page 23008]]

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. Additionally, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \5\ requirement that the rules
of an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\3\ 15 U.S.C. 78f(b).
\4\ 15 U.S.C. 78f(b)(5).
\5\ Id.
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In particular, the Exchange believes removing the marketing fee to
RUT options is reasonable, because it is a fee that will no longer
apply to RUT transactions. The proposed change is also equitable and
not unfairly discriminatory because it applies uniformly to all Trading
Permit Holders and because the marketing fee does not apply to other
Underlying Symbol List A products, of which group RUT belongs.

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 does not
believe that the proposed rule change will impose any burden on
intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act because the proposed change
applies uniformly to Trading Permit Holders and TPHs will no longer
have to pay a marketing fee for RUT transactions. The Exchange does not
believe that the proposed rule change will impose any burden on
intermarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act because RUT is exclusively
listed on Cboe Options and C2. 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.

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 \6\ and paragraph (f) of Rule 19b-4 \7\
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.
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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4(f).
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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 rule-comments@sec.gov. Please include
File Number SR-CBOE-2018-034 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-2018-034. 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-CBOE-2018-034, and should be submitted
on or before June 7, 2018.
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\8\ 17 CFR 200.30-3(a)(12).

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-10503 Filed 5-16-18; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 83, No. 96 / Thursday, May 17, 2018 / Notices 23007

206(4)–5 and has been more rigorous 12. Applicants submit that neither the The text of the proposed rule
than rule 206(4)–5’s requirements as Advisers nor the Contributor sought to change is also available on the
BlackRock has monitored compliance interfere with the Clients’ merit-based Exchange’s website (http://
with the Policy by searching for an selection process for advisory services, www.cboe.com/AboutCBOE/
individual employee’s past political nor did they seek to negotiate higher CBOELegalRegulatoryHome.aspx), at
contributions on the Federal Election fees or greater ancillary benefits than the Exchange’s Office of the Secretary,
Commission’s database whenever an would be achieved in arms’ length and at the Commission’s Public
individual makes a request to BlackRock transactions. Applicants further submit Reference Room.
to pre-clear a contribution to a federal that there was no violation of the
II. Self-Regulatory Organization’s
candidate. Applicants submit that Advisers’ fiduciary duty to deal fairly or
Statement of the Purpose of, and
BlackRock is in the process of disclose material conflicts given the
Statutory Basis for, the Proposed Rule
enhancing this monitoring protocol. absence of any intent or action by the
8. Applicants assert that at no time Change
Advisers or the Contributor to influence
did any employee or covered associate the selection process. Applicants In its filing with the Commission, the
of BlackRock, the Advisers or any of contend that in the case of the Exchange included statements
their affiliates, other than the Contribution, the imposition of the two- concerning the purpose of and basis for
Contributor have any knowledge that year prohibition on compensation does the proposed rule change and discussed
the Contribution had been made before not achieve rule 206(4)–5’s purposes any comments it received on the
its discovery by the Compliance and would result in consequences proposed rule change. The text of these
department in October 2016. disproportionate to the mistake that was statements may be examined at the
9. Applicants assert that after learning made. places specified in Item IV below. The
of the Contribution and confirming the Exchange has prepared summaries, set
For the Commission, by the Division of
Contributor’s covered status, BlackRock Investment Management, under delegated forth in sections A, B, and C below, of
caused the Contributor to promptly authority. the most significant aspects of such
obtain a full refund of the Contribution. Eduardo A. Aleman, statements.
Applicants submit that in response to Assistant Secretary. A. Self-Regulatory Organization’s
the contribution, BlackRock has begun
[FR Doc. 2018–10499 Filed 5–16–18; 8:45 am] Statement of the Purpose of, and
the process of implementing
BILLING CODE 8011–01–P Statutory Basis for, the Proposed Rule
enhancements to the Policy that will
Change
include (a) sending its employees,
including employees of its affiliates a 1. Purpose
SECURITIES AND EXCHANGE
third annual reminder to pre-clear all COMMISSION The Exchange proposes to amend its
political contributions in the United marketing fee program with respect to
States, including those to federal [Release No. 34–83220; File No. SR–CBOE– the fee assessed on Russell 2000 Index
candidates (b) revising its annual 2018–034]
(‘‘RUT’’) options. Currently, the
computer-based training module to Exchange assesses the marketing fee on
highlight the need to pre-clear all Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and RUT options at a rate of $0.30 per
political contributions in the United contract. The Exchange no longer
States, including those to federal Immediate Effectiveness of a Proposed
Rule Change To Amend the Marketing wishes to assess the marketing fee to
candidates, and (c) enhancing its RUT options. The Exchange notes that
protocol to monitor compliance with the Fee Program With Respect to the
Russell 2000 Index Options the marketing fee is similarly not
Policy’s pre-clearance requirements by applied to other Underlying Symbol List
searching the FEC’s and certain states’ May 11, 2018. A products, which group includes RUT.
campaign finance databases for Pursuant to Section 19(b)(1) of the The Exchange believes removing the
contributions made by a sampling of Securities Exchange Act of 1934 (the marketing fee will encourage greater
covered associates on a quarterly basis. ‘‘Act’’) 1, and Rule 19b–4 thereunder,2 liquidity in RUT, which benefits all
Finally, BlackRock’s Compliance notice is hereby given that on May 1, market participants.
department will remind the Contributor 2018, Cboe Exchange, Inc. (the
of the Policy’s pre-clearance ‘‘Exchange’’ or ‘‘Cboe Options’’) filed 2. Statutory Basis
requirement on at least a quarterly basis. with the Securities and Exchange The Exchange believes the proposed
10. Applicants state that the Commission (the ‘‘Commission’’) the rule change is consistent with the
Contributor is and has, at all relevant proposed rule change as described in Securities Exchange Act of 1934 (the
times, been a covered associate of the Items I, II, and III below, which Items ‘‘Act’’) and the rules and regulations
Advisers. Applicants note that the have been prepared by the Exchange. thereunder applicable to the Exchange
Contributor has never solicited The Commission is publishing this and, in particular, the requirements of
investment advisory business covered notice to solicit comments on the Section 6(b) of the Act.3 Specifically,
under rule 206(4)–5 from government proposed rule change from interested the Exchange believes the proposed rule
entities and has had no direct contact or persons. change is consistent with the Section
involvement with any of the Clients or 6(b)(5) 4 requirements that the rules of
the members of their Boards regarding I. Self-Regulatory Organization’s an exchange be designed to prevent
any business matters. Statement of the Terms of Substance of fraudulent and manipulative acts and
11. Applicants assert that the Clients’ the Proposed Rule Change practices, to promote just and equitable
daltland on DSKBBV9HB2PROD with NOTICES

initial investments with the Advisers The Exchange proposes to amend its principles of trade, to foster cooperation
substantially predate the Contribution. marketing fee program with respect to and coordination with persons engaged
They were done on an arm’s length the fee assessed on Russell 2000 Index in regulating, clearing, settling,
basis and the Contributor and the (‘‘RUT’’) options. processing information with respect to,
Applicants took no action to obtain any
direct or indirect influence from the 1 15 U.S.C. 78s(b)(1). 3 15 U.S.C. 78f(b).
Official. 2 17 CFR 240.19b–4. 4 15 U.S.C. 78f(b)(5).

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23008 Federal Register / Vol. 83, No. 96 / Thursday, May 17, 2018 / Notices

and facilitating transactions in III. Date of Effectiveness of the Reference Room, 100 F Street NE,
securities, to remove impediments to Proposed Rule Change and Timing for Washington, DC 20549, on official
and perfect the mechanism of a free and Commission Action business days between the hours of
open market and a national market The foregoing rule change has become 10:00 a.m. and 3:00 p.m. Copies of the
system, and, in general, to protect effective pursuant to Section 19(b)(3)(A) filing also will be available for
investors and the public interest. of the Act 6 and paragraph (f) of Rule inspection and copying at the principal
Additionally, the Exchange believes the 19b–4 7 thereunder. At any time within office of the Exchange. All comments
proposed rule change is consistent with 60 days of the filing of the proposed rule received will be posted without change.
the Section 6(b)(5) 5 requirement that change, the Commission summarily may Persons submitting comments are
the rules of an exchange not be designed temporarily suspend such rule change if cautioned that we do not redact or edit
to permit unfair discrimination between it appears to the Commission that such personal identifying information from
customers, issuers, brokers, or dealers. action is necessary or appropriate in the comment submissions. You should
public interest, for the protection of submit only information that you wish
In particular, the Exchange believes investors, or otherwise in furtherance of
removing the marketing fee to RUT to make available publicly. All
the purposes of the Act. If the submissions should refer to File
options is reasonable, because it is a fee Commission takes such action, the
that will no longer apply to RUT Number SR–CBOE–2018–034, and
Commission will institute proceedings
transactions. The proposed change is should be submitted on or before June
to determine whether the proposed rule
also equitable and not unfairly 7, 2018.
change should be approved or
discriminatory because it applies disapproved. For the Commission, by the Division of
uniformly to all Trading Permit Holders Trading and Markets, pursuant to delegated
IV. Solicitation of Comments
and because the marketing fee does not authority.8
apply to other Underlying Symbol List Interested persons are invited to Eduardo A. Aleman,
A products, of which group RUT submit written data, views, and
Assistant Secretary.
belongs. arguments concerning the foregoing,
[FR Doc. 2018–10503 Filed 5–16–18; 8:45 am]
including whether the proposed rule
B. Self-Regulatory Organization’s change is consistent with the Act. BILLING CODE 8011–01–P
Statement on Burden on Competition Comments may be submitted by any of
the following methods:
The Exchange does not believe that SECURITIES AND EXCHANGE
the proposed rule change will impose Electronic Comments COMMISSION
any burden on competition that is not • Use the Commission’s internet
necessary or appropriate in furtherance comment form (http://www.sec.gov/ [Release No. 34–83080; File No. SR–Phlx–
of the purposes of the Act. The rules/sro.shtml); or 2018–31]
Exchange does not believe that the • Send an email to rule-comments@
proposed rule change will impose any sec.gov. Please include File Number SR– Self-Regulatory Organizations; Nasdaq
burden on intramarket competition that CBOE–2018–034 on the subject line. PHLX LLC; Notice of Filing and
is not necessary or appropriate in Paper Comments Immediate Effectiveness of Proposed
furtherance of the purposes of the Act Rule Change To Amend the
• Send paper comments in triplicate
because the proposed change applies Exchange’s Pricing Schedule at
to Secretary, Securities and Exchange
uniformly to Trading Permit Holders Commission, 100 F Street NE, Section II To Clarify Fees Applicable
and TPHs will no longer have to pay a Washington, DC 20549–1090. To Correcting ‘‘As/of’’ or ‘‘Reversal’’
marketing fee for RUT transactions. The Trades
All submissions should refer to File
Exchange does not believe that the Number SR–CBOE–2018–034. This file April 20, 2018.
proposed rule change will impose any number should be included on the
burden on intermarket competition that subject line if email is used. To help the Correction
is not necessary or appropriate in Commission process and review your
furtherance of the purposes of the Act comments more efficiently, please use In notice document 2018–08729,
because RUT is exclusively listed on only one method. The Commission will beginning on page 18630 in the issue of
Cboe Options and C2. To the extent that post all comments on the Commission’s Thursday, April 26, 2018, make the
the proposed changes make Cboe internet website (http://www.sec.gov/ following correction:
Options a more attractive marketplace rules/sro.shtml). Copies of the On page 18630, in the middle column,
for market participants at other submission, all subsequent in the document heading, ‘‘[Release No.
exchanges, such market participants are amendments, all written statements 34–83080; File No. SR–18–31]’’ should
welcome to become Cboe Options with respect to the proposed rule read ‘‘[Release No. 34–83080; File No.
market participants. change that are filed with the SR–Phlx–2018–31]’’.
Commission, and all written [FR Doc. C1–2018–08729 Filed 5–16–18; 8:45 am]
C. Self-Regulatory Organization’s communications relating to the
Statement on Comments on the BILLING CODE 1301–00–D
proposed rule change between the
Proposed Rule Change Received From Commission and any person, other than
Members, Participants, or Others those that may be withheld from the
daltland on DSKBBV9HB2PROD with NOTICES

public in accordance with the
The Exchange neither solicited nor provisions of 5 U.S.C. 552, will be
received comments on the proposed available for website viewing and
rule change. printing in the Commission’s Public
6 15 U.S.C. 78s(b)(3)(A).
5 Id. 7 17 CFR 240.19b–4(f). 8 17 CFR 200.30–3(a)(12).

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Document Created: 2018-05-17 00:50:49
Document Modified: 2018-05-17 00:50:49

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 23007