83_FR_31720 83 FR 31590 - Self-Regulatory Organizations; Cboe C2 Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Penny Pilot Program

83 FR 31590 - Self-Regulatory Organizations; Cboe C2 Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Penny Pilot Program

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 130 (July 6, 2018)

Page Range31590-31592
FR Document2018-14468

Federal Register, Volume 83 Issue 130 (Friday, July 6, 2018)
[Federal Register Volume 83, Number 130 (Friday, July 6, 2018)]
[Notices]
[Pages 31590-31592]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-14468]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83568; File No. SR-C2-2018-015]


Self-Regulatory Organizations; Cboe C2 Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Relating 
to the Penny Pilot Program

June 29, 2018.
    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 June 26, 2018, Cboe C2 Exchange, Inc. (the ``Exchange'' or ``C2'') 
filed with the Securities and Exchange Commission (the ``Commission'') 
the proposed rule change as described in Items I and II below, which 
Items have been prepared by the Exchange. The Exchange filed the 
proposal as a ``non-controversial'' proposed rule change pursuant to 
Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) 
thereunder.\4\ 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)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend the operation of Penny Pilot 
Program through December 31, 2017. The text of the proposed rule change 
is provided below.
    (additions are in italics; deletions are [bracketed])
* * * * *
Rules of Cboe C2 Exchange, Inc.
* * * * *
CHAPTER 6 Trading on the Exchange
* * * * *
Rule 6.4. Minimum Increments for Bids and Offers
    (a) (No change).
    (b) (No change).
Interpretations and Policies . . .
    .01 (No change).
    .02 The Exchange may replace any option class participating in the 
Penny Pilot Program that has been delisted with the next most actively 
traded, multiply listed option class, based on national average daily 
volume in the preceding six calendar months, that is not yet included 
in the Pilot Program. Any replacement class would be added on the 
second trading day following [January]July 1, 2018. The Penny Pilot 
will expire on [June 30]December 31, 2018.
* * * * *
    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

[[Page 31591]]

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 Penny Pilot Program (the ``Pilot Program'') is scheduled to 
expire on June 30, 2018. The Exchange proposes to extend the Pilot 
Program until December 31, 2018. The Exchange believes that extending 
the Pilot Program will allow for further analysis of the Pilot Program 
and a determination of how the Pilot Program should be structured in 
the future.
    During this extension of the Pilot Program, the Exchange proposes 
that it may replace any option class that is currently included in the 
Pilot Program and that has been delisted with the next most actively 
traded, multiply listed option class that is not yet participating in 
the Pilot Program (``replacement class''). Any replacement class would 
be determined based on national average daily volume in the preceding 
six months,\5\ and would be added on the second trading day following 
July 1, 2018. The Exchange will announce to its Trading Permit Holders 
by circular any replacement classes in the Pilot Program. The Exchange 
notes that it intends to utilize the same parameters to select 
prospective replacement classes as was originally approved.
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    \5\ The month immediately preceding a replacement class's 
addition to the Pilot Program (i.e., June) would not be used for 
purposes of the six-month analysis. Thus, a replacement class to be 
added on the second trading day following July 1, 2018 would be 
identified based on The Option Clearing Corporation's trading volume 
data from December 1, 2017 through May 31, 2018.
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    The Exchange is specifically authorized to act jointly with the 
other options exchanges participating in the Pilot Program in 
identifying any replacement class. The Exchange lastly represents that 
the Exchange has the necessary system capacity to continue to support 
operation of the Penny Pilot.
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.\6\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \7\ 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 facilitation 
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) \8\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers. In particular, the proposed rule change allows for 
an extension of the Pilot Program for the benefit of market 
participants. 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).
    \8\ Id.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    C2 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. Specifically, the Exchange 
believes that, by extending the expiration of the Pilot Program, the 
proposed rule change will allow for further analysis of the Pilot 
Program and a determination of how the Program shall be structured in 
the future. In doing so, the proposed rule change will also serve to 
promote regulatory clarity and consistency, thereby reducing burdens on 
the marketplace and facilitating investor protection. In addition, the 
Exchange has been authorized to act jointly in extending the Pilot 
Program and believes the other exchanges will be filing similar 
extensions.

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 Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\ 
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 and Rule 19b-
4(f)(6)(iii) thereunder.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally 
does not become operative prior to 30 days after the date of the 
filing.\12\ However, pursuant to Rule 19b-4(f)(6)(iii),\13\ 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.\14\ Accordingly, the Commission designates 
the proposed rule change as operative upon filing with the 
Commission.\15\
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    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 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.
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ See Securities Exchange Act Release No. 61061 (November 24, 
2009), 74 FR 62857 (December 1, 2009) (SR-NYSEArca-2009-44).
    \15\ 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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[[Page 31592]]

    At any time within 60 days of the filing of such 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) \16\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-C2-2018-015 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-C2-2018-015. 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 (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-C2-2018-015 and should be submitted on 
or before July 27, 2018.
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    \17\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-14468 Filed 7-5-18; 8:45 am]
 BILLING CODE 8011-01-P



                                               31590                             Federal Register / Vol. 83, No. 130 / Friday, July 6, 2018 / Notices

                                               the same features and performance,13                     promote just and equitable principles of                proposal as a ‘‘non-controversial’’
                                               offer the same pricing, and be governed                  trade, and in general, to protect                       proposed rule change pursuant to
                                               by the same substantive rules, policies,                 investors and the public interest.                      Section 19(b)(3)(A)(iii) of the Act 3 and
                                               and procedures. A single set of                             The Commission believes that the                     Rule 19b–4(f)(6) thereunder.4 The
                                               application materials and clearing                       proposal to establish the FINRA/Nasdaq                  Commission is publishing this notice to
                                               arrangements will provide for access to                  TRF Chicago is consistent with the                      solicit comments on the proposed rule
                                               both TRFs. Moreover, Nasdaq, as the                      purposes of the Act and with FINRA’s                    change from interested persons.
                                               Business Member, has advised FINRA                       responsibility to enforce compliance by
                                                                                                        its members with its rules and with the                 I. Self-Regulatory Organization’s
                                               that these two TRFs will evolve in
                                                                                                        Act. FINRA states that geographic                       Statement of the Terms of Substance of
                                               tandem and remain the same going
                                                                                                        dispersion of these TRFs would reduce                   the Proposed Rule Change
                                               forward (for example, because the same
                                               fee and credit schedule under the Rule                   the risk of a regional outage affecting                    The Exchange proposes to extend the
                                               7600A Series will apply to both TRFs,                    them both simultaneously. By providing                  operation of Penny Pilot Program
                                               any pricing changes would apply to                       members with an alternative FINRA                       through December 31, 2017. The text of
                                               both TRFs).14 The proposed rule change                   facility in a different location than the               the proposed rule change is provided
                                               would allow firms to aggregate the                       existing FINRA/Nasdaq TRF with which                    below.
                                               volume of trades that they report to the                 to satisfy their trade reporting                           (additions are in italics; deletions are
                                               two TRFs, which will enable firms to                     obligations, the Commission believes                    [bracketed])
                                               continue to qualify for any volume-                      that the proposed rule change should                    *     *     *     *     *
                                               based pricing that they would otherwise                  enhance the resiliency and promote the
                                                                                                        integrity of the OTC market.                            Rules of Cboe C2 Exchange, Inc.
                                               qualify for if they limited their trade
                                               reporting to one of those facilities.                    Accordingly, for the reasons discussed                  *          *       *       *      *
                                               Finally, FINRA would amend Rules                         above, the Commission finds that the
                                                                                                                                                                CHAPTER 6 Trading on the Exchange
                                               6300A, 7200A, and 7600A Series, which                    proposed rule change is consistent with
                                               govern the FINRA/Nasdaq TRF Carteret,                    Section 15A(b)(6) of the Act.                           *          *       *       *      *
                                               to accommodate the establishment of                      IV. Conclusion                                          Rule 6.4. Minimum Increments for Bids
                                               the FINRA/Nasdaq TRF Chicago.15                                                                                  and Offers
                                                                                                          It is therefore ordered pursuant to
                                               III. Discussion and Commission                           Section 19(b)(2) of the Act 18 that the                   (a) (No change).
                                               Findings                                                 proposed rule change (SR–FINRA–                           (b) (No change).
                                                  After careful review, the Commission                  2018–013), as modified by Amendment                     Interpretations and Policies . . .
                                               finds that the proposed rule change is                   No. 1, be and hereby is approved.
                                                                                                                                                                   .01 (No change).
                                               consistent with the requirements of the                    For the Commission, by the Division of
                                                                                                                                                                   .02 The Exchange may replace any
                                               Act and the rules and regulations                        Trading and Markets, pursuant to delegated
                                                                                                        authority.19                                            option class participating in the Penny
                                               thereunder applicable to a national
                                                                                                        Eduardo A. Aleman,
                                                                                                                                                                Pilot Program that has been delisted
                                               securities association.16 In particular,
                                                                                                                                                                with the next most actively traded,
                                               the Commission finds that the proposed                   Assistant Secretary.
                                                                                                                                                                multiply listed option class, based on
                                               rule change is consistent with Section                   [FR Doc. 2018–14462 Filed 7–5–18; 8:45 am]
                                                                                                                                                                national average daily volume in the
                                               15A(b)(6) of the Act,17 which requires,                  BILLING CODE 8011–01–P
                                                                                                                                                                preceding six calendar months, that is
                                               among other things, that FINRA rules be
                                                                                                                                                                not yet included in the Pilot Program.
                                               designed to prevent fraudulent and
                                                                                                                                                                Any replacement class would be added
                                               manipulative acts and practices, to                      SECURITIES AND EXCHANGE
                                                                                                                                                                on the second trading day following
                                                                                                        COMMISSION
                                                  13 Users of the two FINRA/Nasdaq TRFs may
                                                                                                                                                                [January]July 1, 2018. The Penny Pilot
                                               experience latency differences due to the different      [Release No. 34–83568; File No. SR–C2–                  will expire on [June 30]December 31,
                                               locations of the TRFs.                                   2018–015]                                               2018.
                                                  14 According to Nasdaq, the FINRA/Nasdaq TRF
                                                                                                        Self-Regulatory Organizations; Cboe                     *      *    *     *    *
                                               Chicago will include several new components to
                                                                                                                                                                   The text of the proposed rule change
                                               provide performance improvements and operational         C2 Exchange, Inc.; Notice of Filing and
                                               efficiencies that Nasdaq intends to incorporate into                                                             is also available on the Exchange’s
                                                                                                        Immediate Effectiveness of a Proposed
                                               the FINRA/Nasdaq TRF Carteret shortly after the                                                                  website (http://www.cboe.com/
                                               launch of FINRA/Nasdaq TRF Chicago. Nasdaq will          Rule Change Relating to the Penny
                                                                                                                                                                AboutCBOE/CBOELegalRegulatory
                                               provide participants with notice prior to re-            Pilot Program
                                               platforming the FINRA/Nasdaq TRF Carteret. After
                                                                                                                                                                Home.aspx), at the Exchange’s Office of
                                               Nasdaq completes this re-platforming, Nasdaq             June 29, 2018.                                          the Secretary, and at the Commission’s
                                               generally intends to perform updates, upgrades,             Pursuant to Section 19(b)(1) of the                  Public Reference Room.
                                               fixes or other modifications to the two FINRA/           Securities Exchange Act of 1934
                                               Nasdaq TRFs in tandem. However, Nasdaq notes                                                                     II. Self-Regulatory Organization’s
                                               that there may be instances in which it will be          (‘‘Act’’),1 and Rule 19b–4 thereunder,2                 Statement of the Purpose of, and
                                               necessary for Nasdaq to act in sequence. During          notice is hereby given that on June 26,                 Statutory Basis for, the Proposed Rule
                                               such instances, there may be disparities between         2018, Cboe C2 Exchange, Inc. (the                       Change
                                               the two TRFs with respect to function or                 ‘‘Exchange’’ or ‘‘C2’’) filed with the
                                               performance. Nasdaq expects that any disparity in                                                                   In its filing with the Commission, the
                                               function or performance between the two TRFs that        Securities and Exchange Commission
                                               arises during sequential changes will be transitory.     (the ‘‘Commission’’) the proposed rule                  Exchange included statements
                                               Nasdaq will provide participants with notice if it       change as described in Items I and II                   concerning the purpose of and basis for
daltland on DSKBBV9HB2PROD with NOTICES




                                               anticipates more than a de minimis transition            below, which Items have been prepared                   the proposed rule change and discussed
                                               period.                                                                                                          any comments it received on the
                                                  15 See Notice at 18381–82.
                                                                                                        by the Exchange. The Exchange filed the
                                                  16 In approving this proposed rule change, the
                                                                                                                                                                proposed rule change. The text of these
                                               Commission has considered the proposed rule
                                                                                                             18 15 U.S.C. 78s(b)(2).                            statements may be examined at the
                                                                                                             19 17 CFR 200.30–3(a)(12).
                                               change’s impact on efficiency, competition, and
                                               capital formation. See 15 U.S.C. 78c(f).                      1 15 U.S.C. 78s(b)(1).                                 3 15   U.S.C. 78s(b)(3)(A)(iii).
                                                  17 15 U.S.C. 78o–3(b)(6).                                  2 17 CFR 240.19b–4.                                    4 17   CFR 240.19b–4(f)(6).



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                                                                                 Federal Register / Vol. 83, No. 130 / Friday, July 6, 2018 / Notices                                                          31591

                                               places specified in Item IV below. The                   6(b)(5) 7 requirements that the rules of                    III. Date of Effectiveness of the
                                               Exchange has prepared summaries, set                     an exchange be designed to prevent                          Proposed Rule Change and Timing for
                                               forth in sections A, B, and C below, of                  fraudulent and manipulative acts and                        Commission Action
                                               the most significant aspects of such                     practices, to promote just and equitable                       The Exchange has filed the proposed
                                               statements.                                              principles of trade, to foster cooperation                  rule change pursuant to Section
                                               A. Self-Regulatory Organization’s                        and coordination with persons engaged                       19(b)(3)(A)(iii) of the Act 9 and Rule
                                               Statement of the Purpose of, and                         in regulating, clearing, settling,                          19b–4(f)(6) thereunder.10 Because the
                                               Statutory Basis for, the Proposed Rule                   processing information with respect to,                     proposed rule change does not: (i)
                                               Change                                                   and facilitation transactions in                            Significantly affect the protection of
                                                                                                        securities, to remove impediments to                        investors or the public interest; (ii)
                                               1. Purpose
                                                                                                        and perfect the mechanism of a free and                     impose any significant burden on
                                                  The Penny Pilot Program (the ‘‘Pilot                  open market and a national market                           competition; and (iii) become operative
                                               Program’’) is scheduled to expire on                     system, and, in general, to protect                         prior to 30 days from the date on which
                                               June 30, 2018. The Exchange proposes                     investors and the public interest.                          it was filed, or such shorter time as the
                                               to extend the Pilot Program until                        Additionally, the Exchange believes the                     Commission may designate, if
                                               December 31, 2018. The Exchange                          proposed rule change is consistent with                     consistent with the protection of
                                               believes that extending the Pilot                                                                                    investors and the public interest, the
                                                                                                        the Section 6(b)(5) 8 requirement that
                                               Program will allow for further analysis                                                                              proposed rule change has become
                                                                                                        the rules of an exchange not be designed
                                               of the Pilot Program and a                                                                                           effective pursuant to Section 19(b)(3)(A)
                                               determination of how the Pilot Program                   to permit unfair discrimination between
                                                                                                        customers, issuers, brokers, or dealers.                    of the Act and Rule 19b–4(f)(6)(iii)
                                               should be structured in the future.                                                                                  thereunder.
                                                  During this extension of the Pilot                    In particular, the proposed rule change
                                                                                                        allows for an extension of the Pilot                           A proposed rule change filed under
                                               Program, the Exchange proposes that it
                                                                                                        Program for the benefit of market                           Rule 19b–4(f)(6) 11 normally does not
                                               may replace any option class that is
                                                                                                        participants. The Exchange notes that                       become operative prior to 30 days after
                                               currently included in the Pilot Program
                                                                                                                                                                    the date of the filing.12 However,
                                               and that has been delisted with the next                 this proposal does not propose any new
                                                                                                                                                                    pursuant to Rule 19b–4(f)(6)(iii),13 the
                                               most actively traded, multiply listed                    policies or provisions that are unique or
                                                                                                                                                                    Commission may designate a shorter
                                               option class that is not yet participating               unproven, but instead relates to the
                                                                                                                                                                    time if such action is consistent with the
                                               in the Pilot Program (‘‘replacement                      continuation of an existing program that                    protection of investors and the public
                                               class’’). Any replacement class would be                 operates on a pilot basis.                                  interest. The Exchange has asked the
                                               determined based on national average
                                                                                                        B. Self-Regulatory Organization’s                           Commission to waive the 30-day
                                               daily volume in the preceding six
                                                                                                        Statement on Burden on Competition                          operative delay so that the proposal may
                                               months,5 and would be added on the
                                                                                                                                                                    become operative immediately upon
                                               second trading day following July 1,                       C2 does not believe that the proposed                     filing. The Commission believes that
                                               2018. The Exchange will announce to its
                                                                                                        rule change will impose any burden on                       waiving the 30-day operative delay is
                                               Trading Permit Holders by circular any
                                                                                                        competition that is not necessary or                        consistent with the protection of
                                               replacement classes in the Pilot
                                                                                                        appropriate in furtherance of the                           investors and the public interest
                                               Program. The Exchange notes that it
                                                                                                        purposes of the Act. Specifically, the                      because doing so will allow the Pilot
                                               intends to utilize the same parameters to
                                                                                                        Exchange believes that, by extending the                    Program to continue without
                                               select prospective replacement classes
                                                                                                        expiration of the Pilot Program, the                        interruption in a manner that is
                                               as was originally approved.
                                                                                                        proposed rule change will allow for                         consistent with the Commission’s prior
                                                  The Exchange is specifically
                                                                                                        further analysis of the Pilot Program and                   approval of the extension and expansion
                                               authorized to act jointly with the other
                                                                                                        a determination of how the Program                          of the Pilot Program and will allow the
                                               options exchanges participating in the
                                                                                                        shall be structured in the future. In                       Exchange and the Commission
                                               Pilot Program in identifying any
                                                                                                        doing so, the proposed rule change will                     additional time to analyze the impact of
                                               replacement class. The Exchange lastly
                                                                                                                                                                    the Pilot Program.14 Accordingly, the
                                               represents that the Exchange has the                     also serve to promote regulatory clarity
                                               necessary system capacity to continue to                                                                             Commission designates the proposed
                                                                                                        and consistency, thereby reducing
                                               support operation of the Penny Pilot.                                                                                rule change as operative upon filing
                                                                                                        burdens on the marketplace and
                                                                                                                                                                    with the Commission.15
                                               2. Statutory Basis                                       facilitating investor protection. In
                                                                                                        addition, the Exchange has been                               9 15
                                                  The Exchange believes the proposed                                                                                        U.S.C. 78s(b)(3)(A)(iii).
                                                                                                        authorized to act jointly in extending                        10 17  CFR 240.19b–4(f)(6).
                                               rule change is consistent with the                       the Pilot Program and believes the other                       11 17 CFR 240.19b–4(f)(6).
                                               Securities Exchange Act of 1934 (the
                                                                                                        exchanges will be filing similar                               12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
                                               ‘‘Act’’) and the rules and regulations                                                                               4(f)(6)(iii) requires the Exchange to give the
                                                                                                        extensions.
                                               thereunder applicable to the Exchange                                                                                Commission written notice of the Exchange’s intent
                                               and, in particular, the requirements of                  C. Self-Regulatory Organization’s                           to file the proposed rule change along with a brief
                                               Section 6(b) of the Act.6 Specifically,                                                                              description and the text of the proposed rule
                                                                                                        Statement on Comments on the                                change, at least five business days prior to the date
                                               the Exchange believes the proposed rule                  Proposed Rule Change Received From                          of filing of the proposed rule change, or such
                                               change is consistent with the Section                    Members, Participants, or Others                            shorter time as designated by the Commission. The
                                                                                                                                                                    Exchange has satisfied this pre-filing requirement.
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                                                  5 The month immediately preceding a                     The Exchange neither solicited nor                           13 17 CFR 240.19b–4(f)(6)(iii).

                                               replacement class’s addition to the Pilot Program        received comments on the proposed                              14 See Securities Exchange Act Release No. 61061

                                               (i.e., June) would not be used for purposes of the                                                                   (November 24, 2009), 74 FR 62857 (December 1,
                                               six-month analysis. Thus, a replacement class to be      rule change.                                                2009) (SR–NYSEArca–2009–44).
                                               added on the second trading day following July 1,                                                                       15 For purposes only of waiving the operative
                                               2018 would be identified based on The Option                                                                         delay for this proposal, the Commission has
                                               Clearing Corporation’s trading volume data from                                                                      considered the proposed rule’s impact on
                                                                                                             7 15    U.S.C. 78f(b)(5).
                                               December 1, 2017 through May 31, 2018.                                                                               efficiency, competition, and capital formation. See
                                                  6 15 U.S.C. 78f(b).                                        8 Id.                                                  15 U.S.C. 78c(f).



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                                               31592                                Federal Register / Vol. 83, No. 130 / Friday, July 6, 2018 / Notices

                                                  At any time within 60 days of the                        office of the Exchange. All comments                      Cboe Exchange, Inc.
                                               filing of such proposed rule change, the                    received will be posted without change.                   Rules
                                               Commission summarily may                                    Persons submitting comments are
                                               temporarily suspend such rule change if                     cautioned that we do not redact or edit                   *       *    *   *    *
                                               it appears to the Commission that such                      personal identifying information from                     Rule 6.42. Minimum Increments for
                                               action is necessary or appropriate in the                   comment submissions. You should                           Bids and Offers
                                               public interest, for the protection of                      submit only information that you wish
                                               investors, or otherwise in furtherance of                   to make available publicly. All                              The Board of Directors may establish
                                               the purposes of the Act. If the                             submissions should refer to File                          minimum increments for options traded
                                               Commission takes such action, the                           Number SR–C2–2018–015 and should                          on the Exchange. When the Board of
                                               Commission shall institute proceedings                      be submitted on or before July 27, 2018.                  Directors determines to change the
                                               under Section 19(b)(2)(B) 16 of the Act to                                                                            minimum increments, the Exchange
                                                                                                             For the Commission, by the Division of
                                               determine whether the proposed rule                         Trading and Markets, pursuant to delegated                will designate such change as a stated
                                               change should be approved or                                authority.17                                              policy, practice, or interpretation with
                                               disapproved.                                                Eduardo A. Aleman,                                        respect to the administration of Rule
                                                                                                           Assistant Secretary.
                                                                                                                                                                     6.42 within the meaning of
                                               IV. Solicitation of Comments                                                                                          subparagraph (3)(A) of subsection 19(b)
                                                                                                           [FR Doc. 2018–14468 Filed 7–5–18; 8:45 am]
                                                 Interested persons are invited to                                                                                   of the Exchange Act and will file a rule
                                                                                                           BILLING CODE 8011–01–P
                                               submit written data, views, and                                                                                       change for effectiveness upon filing
                                               arguments concerning the foregoing,                                                                                   with the Commission. Until such time
                                               including whether the proposed rule                                                                                   as the Board of Directors makes a
                                                                                                           SECURITIES AND EXCHANGE
                                               change is consistent with the Act.                                                                                    change to the minimum increments, the
                                                                                                           COMMISSION
                                               Comments may be submitted by any of                                                                                   following minimum increments shall
                                               the following methods:                                      [Release No. 34–83567; File No. SR–CBOE–                  apply to options traded on the
                                                                                                           2018–047]                                                 Exchange:
                                               Electronic Comments
                                                                                                                                                                        (1) (No change).
                                                 • Use the Commission’s internet                           Self-Regulatory Organizations; Cboe
                                                                                                                                                                        (2) (No change).
                                               comment form (http://www.sec.gov/                           Exchange, Inc.; Notice of Filing and
                                                                                                                                                                        (3) The decimal increments for bids
                                               rules/sro.shtml); or                                        Immediate Effectiveness of a Proposed
                                                                                                                                                                     and offers for all series of the option
                                                 • Send an email to rule-comments@                         Rule Change Relating to the Penny
                                                                                                                                                                     classes participating in the Penny Pilot
                                               sec.gov. Please include File Number SR–                     Pilot Program
                                                                                                                                                                     Program are: $0.01 for all option series
                                               C2–2018–015 on the subject line.                            June 29, 2018.                                            quoted below $3 (including LEAPS),
                                               Paper Comments                                                 Pursuant to Section 19(b)(1) of the                    and $0.05 for all option series $3 and
                                                  • Send paper comments in triplicate                      Securities Exchange Act of 1934                           above (including LEAPS). For QQQQs,
                                               to Secretary, Securities and Exchange                       (‘‘Act’’),1 and Rule 19b–4 thereunder, 2                  IWM, and SPY, the minimum increment
                                               Commission, 100 F Street NE,                                notice is hereby given that on June 26,                   is $0.01 for all option series. The
                                               Washington, DC 20549–1090.                                  2018, Cboe Exchange, Inc. (the                            Exchange may replace any option class
                                                                                                           ‘‘Exchange’’ or ‘‘Cboe Options’’) filed                   participating in the Penny Pilot Program
                                               All submissions should refer to File                        with the Securities and Exchange                          that has been delisted with the next
                                               Number SR–C2–2018–015. This file                            Commission (the ‘‘Commission’’) the                       most actively-traded, multiply-listed
                                               number should be included on the                            proposed rule change as described in                      option class, based on national average
                                               subject line if email is used. To help the                  Items I and II below, which Items have                    daily volume in the preceding six
                                               Commission process and review your                          been prepared by the Exchange. The                        calendar months that is not yet included
                                               comments more efficiently, please use                       Exchange filed the proposal as a ‘‘non-                   in the Pilot Program. Any replacement
                                               only one method. The Commission will                        controversial’’ proposed rule change                      class would be added on the second
                                               post all comments on the Commission’s                       pursuant to Section 19(b)(3)(A)(iii) of                   trading day following [January 1, 2018]
                                               internet website (http://www.sec.gov/                       the Act 3 and Rule 19b–4(f)(6)                            July 1, 2018. The Penny Pilot shall
                                               rules/sro.shtml). Copies of the                             thereunder.4 The Commission is                            expire on [June 30, 2018] December 31,
                                               submission, all subsequent                                  publishing this notice to solicit                         2018.
                                               amendments, all written statements                          comments on the proposed rule change                         (4) (No change).
                                               with respect to the proposed rule                           from interested persons.
                                               change that are filed with the                                                                                        . . . Interpretations and Policies:
                                               Commission, and all written                                 I. Self-Regulatory Organization’s                            .01–.04 (No change).
                                               communications relating to the                              Statement of the Terms of Substance of                    *      *    *     *     *
                                               proposed rule change between the                            the Proposed Rule Change                                     The text of the proposed rule change
                                               Commission and any person, other than                          The Exchange proposes to extend the                    is also available on the Exchange’s
                                               those that may be withheld from the                         operation of Penny Pilot Program                          website (http://www.cboe.com/About
                                               public in accordance with the                               through December 31, 2018. The text of                    CBOE/CBOELegalRegulatoryHome.
                                               provisions of 5 U.S.C. 552, will be                         the proposed rule change is provided                      aspx), at the Exchange’s Office of the
                                               available for website viewing and                           below.                                                    Secretary, and at the Commission’s
                                               printing in the Commission’s Public                         (additions are in italics; deletions are                  Public Reference Room.
                                               Reference Room, 100 F Street NE,                               [bracketed])
daltland on DSKBBV9HB2PROD with NOTICES




                                                                                                                                                                     II. Self-Regulatory Organization’s
                                               Washington, DC 20549, on official                           *      *    *    *      *                                 Statement of the Purpose of, and
                                               business days between the hours of
                                                                                                                                                                     Statutory Basis for, the Proposed Rule
                                               10:00 a.m. and 3:00 p.m. Copies of the                           17 17 CFR 200.30–3(a)(12).                           Change
                                               filing also will be available for                                1 15 U.S.C. 78s(b)(1).
                                               inspection and copying at the principal                          2 17 CFR 240.19b–4.                                    In its filing with the Commission, the
                                                                                                                3 15 U.S.C. 78s(b)(3)(A)(iii).                       Exchange included statements
                                                 16 15   U.S.C. 78s(b)(2)(B).                                   4 17 CFR 240.19b–4(f)(6).                            concerning the purpose of and basis for


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Document Created: 2018-07-06 00:46:49
Document Modified: 2018-07-06 00:46:49
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation83 FR 31590 

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