83 FR 3372 - Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Delete Obsolete Rules
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 16 (January 24, 2018)
Federal Register Volume 83, Issue 16 (January 24, 2018)
| Page Range | 3372-3376 | |
| FR Document | 2018-01206 |
[Federal Register Volume 83, Number 16 (Wednesday, January 24, 2018)] [Notices] [Pages 3372-3376] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-01206] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-82529; File No. SR-CBOE-2018-003] Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Delete Obsolete Rules January 18, 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 January 3, 2018, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The 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 delete Rules that no longer apply to the Exchange and make other nonsubstantive changes to the Rules. The text of the proposed rule change is 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 purpose of this rule change is to delete Rules that no longer apply to the Exchange and to make other nonsubstantive changes to the Rules. Deletion of Rules The Exchange proposes to delete the following rules and chapters from its rulebook:Rule 2.40--Market-Maker Surcharge for Brokerage. Rule 2.40 operated as a pilot program until March 30, 2000, at which time the program expired (and the Exchange did not request renewal). The Exchange does not impose a surcharge on Market-Maker transactions pursuant to this rule. Any fees and rebates applicable to any Market- Maker transactions are included in the Cboe Options Fees Schedule. Rule 6.2--Trading Rotations. Rule 6.2 states the Exchange may use the procedures described in current Rules 6.2, 6.2A, or 6.2B to conduct trading rotations in all options listed on the Exchange. Currently, the Exchange only uses the procedures set forth in current Rule 6.2B to conduct trading rotations, and no longer conducts trading rotations pursuant to current Rule 6.2. Therefore, this provision no longer applies to trading on the Exchange.\3\ --------------------------------------------------------------------------- \3\ The proposed rule change makes corresponding changes to the following rules to delete references to ROS and the rule proposed to be deleted: Rules 6.6, 6.18, 6.25(b)(1), 6.73(c), 8.60(c)(7) and Interpretation and Policy .02, 21.11, 22.11, and 24.13. --------------------------------------------------------------------------- Rule 6.2A--Rapid Opening System (``ROS''). The Exchange used ROS prior to open options prior to implementation of the Exchange's Hybrid Trading System, which includes the Hybrid 3.0 Platform. Currently, all options listed on the Exchange trade on its Exchange's Hybrid Trading System. As stated in Rule 6.2A, ROS does not apply to series trading on the Hybrid Trading System, which open on the Cboe Options Hybrid Opening System (``HOSS'') (pursuant to Rule 6.2B). Therefore, Rule 6.2A no longer applies to any options listed for trading on the Exchange.\4\ --------------------------------------------------------------------------- \4\ The proposed rule change makes corresponding changes to the following rules to delete references to ROS and the rule proposed to be deleted: Rules 1.1(fff) and (ggg), 6.2, 6.6, 6.18, 6.25(b)(1), 8.60(c)(7) and Interpretation and Policy .02, 22.11, 24.13. Because the proposed rule change deletes both Rules 6.2 and 6.2A, the proposed rule change also renumbers Rule 6.2B to be Rule 6.2, and makes corresponding changes throughout the Rules. --------------------------------------------------------------------------- Rules 6.8--RAES Operations and 6.9--Automatic ORS Order Execution Against Booked Orders. The Exchange's Retail Automatic Execution System (``RAES'') was an automated execution system feature of the Exchange's Order Routing System (``ORS'') operated by the Exchange and that provided automated order execution and reporting services for options. RAES and ORS are no longer used, as all options [[Page 3373]] trading on the Exchange currently occurs on the Hybrid Trading System, which includes Exchange's Order Handling System (``OHS''). Therefore, RAES and ORS no longer apply to any options listed for trading on the Exchange.\5\ --------------------------------------------------------------------------- \5\ The proposed rule change makes corresponding changes to the following rules to delete references to RAES and ORS, change references from ORS to OHS, and the rules proposed to be deleted: Rules 1.1(fff) and (ggg), 6.3, Interpretation and Policy .05, 6.6(b) and (e) and Interpretation and Policy .01, 6.7(b) (the Hybrid System includes OHS and the book), 6.8C (which the proposed rule change renumbers as 6.8), 6.13(a) and (c), 6.18, 8.7(b)(iii) and Interpretations and Policies .07 (which is being deleted in its entirety, as described below) .11(a) (the Exchange deleted the paragraph letter for current paragraph (b), as it will be the only paragraph in that Interpretation and Policy, as well as the introduction to that paragraph regarding its applicability to classes on the Hybrid System, because all classes are on the Hybrid System), 8.13, 8.16, 8.51(c)(1)(a)(iii), 8.60(c)(7) (the proposed rule change renumbers provisions (8) through (10) as (7) through (9)) and Interpretation and Policy .02, 8.85(a)(ix) (the proposed rule change renumbers subparagraphs (x) and (xi) as (ix) and (x), and deletes from current subparagraph (x) (proposed subparagraph (xi) the introduction to that paragraph regarding its applicability to classes on the Hybrid System, because all classes are on the Hybrid System), 23.7, 24.15, 24.17, 24.21(j)(1), and 24B.15. --------------------------------------------------------------------------- Rule 6.10--LOU System Operations. The Large Order Utility (``LOU'') System was a facility of the Exchange that provided order routing, handling, and execution for eligible options orders routed electronically to the Exchange. The LOU System is no longer used, as all options trading on the Exchange trade on the Hybrid Trading System. Therefore, the LOU System no longer applies to any options listed for trading on the Exchange. Rule 6.13B--Penny Price Improvement. Pursuant to Rule 6.13B, the Exchange may designate one or more options trading on the Hybrid Trading System in a Penny Price Improvement Program, which allows Trading Permit Holders to provide price improvement beyond the Exchange's disseminated quote for classes not already quote in penny increments and for which the simple auction liaison system is not in effect. The Exchange currently has not designated, and has no intention to designate, any options for participation in this program. Therefore, this program no longer applies to any options listed for trading on the Exchange.\6\ --------------------------------------------------------------------------- \6\ The proposed rule change makes corresponding changes to the following rules to delete references to the Penny Price Improvement Program and the rules proposed to be deleted: Rules 1.1(fff) and (ggg), 6.45, Interpretations and Policies .01 and .02, Rule 6.47, Interpretation and Policy .02, and Rule 6.74, Interpretation and Policy .09. --------------------------------------------------------------------------- Rule 6.54(a)--Accommodation Liquidation (Cabinet Trades) for Classes Not Trading on the Cboe Options Hybrid System. Rule 6.54 describes cabinet trading permitted on the Exchange. Paragraph (a) describes cabinet trading for classes not trading on the Hybrid System, while paragraph (b) describes cabinet trading for classes trading on the Hybrid System. All options trading on the Exchange currently trade on the Hybrid Trading System, and thus Rule 6.54 (a) no longer applies to any options listed for trading on the Exchange.\7\ --------------------------------------------------------------------------- \7\ The proposed rule change makes a corresponding change to current paragraph (b), eliminates paragraph lettering for paragraph (b) (as that will be the only paragraph in the rule), and reletters subparagraphs (i) and (ii) as (a) and (b), consistent with paragraph lettering throughout the rules. --------------------------------------------------------------------------- Chapter VII--Order Book Officials. Order Book Officials were Exchange employees responsible for maintaining the book with respect to classes assigned to them, effecting proper executions of orders placed with them, displaying bids and offers, and monitoring the market for classes assigned to them. The Exchange currently has no employees designated as, and does not intend to designate any employees as, Order Book Officials, as Order Book Official functions are generally obsolete now that most trading occurs electronically. The proposed rule change deletes Rules 7.1 through 7.3, 7.4 except for subparagraph (a)(1) (which is being moved to Rule 6.11, with some modifications described below), 7.5, 7.7 through 7.10, and Chapter VII, Section B, as they relate solely to responsibilities of Order Book Officials. Rule 7.4(a)(1) states public customer orders in Hybrid and Hybrid 3.0 classes are eligible for entry into the electronic book, and the Exchange may determine on a class-by-class basis other orders that are eligible for entry into the electronic book. Currently, after a class is open for trading (see Rule 6.2B for a description of orders the System accepts prior to opening), the System accepts for entry into the Book (1) quotes of all Market-Makers and order of any origin code in Hybrid classes and (2) quotes of Lead Market-Makers (``LMMs'') and orders of priority customers in Hybrid 3.0 classes, while the Exchange continues to have flexibility to permit orders of other origin codes be eligible for book entry. The Exchange proposes to codify this current book eligibility (which is consistent with the Exchange's authority in current Rule 7.4(a)(1)) in Rule 6.11. The proposed rule change also deletes the provision in current Rule 7.4(a)(1) that states Trading Permit Holders submitting orders or quotes for entry in to the book must do so electronically and in the format announced by the Exchange. It is redundant to state orders and quotes for entry in the electronic book must be submitted electronically, and Rule 6.53A describes the types of order formats Trading Permit Holders must use.\8\ --------------------------------------------------------------------------- \8\ The proposed rule change makes corresponding changes to the following rules to change cross-references to Rule 7.4 to Rule 6.11: Rules 6.13(b)(i)(A)(2) and (iii), 23.3(b), and 24.11A (the proposed rule change also deletes the Interpretations and Policies section of this rule, as there are currently none). --------------------------------------------------------------------------- Rule 7.5, Interpretation and Policy .03 states every Floor Broker who represents a Market-Maker with an order in any options class must, by public outcry at the post, indicate the identify of such Market- Maker at the request of any Trading Permit Holder or Order Book Official. The proposed rule change moves this provision (with the reference to Order Book Official deleted) to Rule 6.73, which relates to responsibilities of Floor Brokers. Rule 7.6 regarding the requirement for PAR Official to report unusual activity is proposed to move to Rule 6.12B(b)(vi).\9\ The proposed rule change moves currently applicable provisions in Rule 7.12 (regarding PAR Officials) to Rule 6.12B (with some nonsubstantive changes).\10\ PAR Officials are Exchange employees or independent contractors whom the Exchange may designate as being responsible for operating a PAR workstation and effecting proper executions of orders placed with them. PAR Officials no longer maintain the book with respect to assigned classes, as the electronic book manages electronic [[Page 3374]] orders and quotes. The proposed rule change deletes the provision in current Rule 7.12(b)(i) regarding the definition of customer limit orders, as customer orders are now defined in Rule 1.1(www) and (yyy) (which are proposed to be relettered as (yyy) and (zzz), as described below). The proposed rule change deletes current Rule 7.12(b)(i)(C) and (e), which apply to the Intermarket Options Linkage Plan that no longer exists,\11\ and Rule 7.12(b)(1)(E), which relates to orders received during a trading rotation pursuant to Rule 6.2 or HOSS pursuant to Rule 6.2B, as those rules describe how orders received prior or before a rotation are handled. The proposed rule change deletes Rule 7.12(b)(iii), as PAR Officials no longer maintain the book (as described above) and do not have the ability to remove orders from the book. The proposed rule change replaces the term ``senior Trading Operations official'' with ``senior Help Desk personnel'' in current Rule 7.12(b)(iv) (proposed Rule 6.12B(b)(iii), which term is used throughout the rules. The proposed rule change deletes Rule 7.12, Interpretation and Policy .01, as it relates to the Exchange's responsibility to appoint PAR Officials to trading stations prior to March 24, 2006. The Exchange currently has PAR Officials appointed to all trading stations on the trading floor. --------------------------------------------------------------------------- \9\ The proposed rule change makes corresponding changes to the following rules to delete references to Order Book Officials and the rules proposed to be deleted: Rules 6.2 and Interpretation and Policy .01 (the proposed rule change also indicates the exchange may direct how trading rotations occur in Interpretation and Policy .01, which is consistent with the remainder of Rule 6.2), 6.3, Interpretations and Policies .01 and .02 (these interpretations also delete references to post directors, which are no longer used at the Exchange), 6.6(b) and (e) (which also deletes references to post directors, which are no longer used at the Exchange), 6.12A, 6.20(a) and Interpretations and Policies .02 and .04(ii), 6.43(A), 6.45, Interpretations and Policies .01 and .02 (the proposed rule change replaces references to Order Book Officials to PAR Officials, consistent with Interpretation and policy .02, which indicates PAR Officials may perform the functions of Order Book Officials for purposes of that rule), 6.73 Interpretation and Policy .01, 8.7(c) (the Exchange notes Market-Makers not permitted to enter a trading station in a floor brokerage capacity, as set forth in Rule 8.8) and Interpretation and Policy .09 (changes cross-reference to Rule 7.5 to Rule 8.7(d)(iv), which describes current Market-Maker obligations, including the obligation of Market-Maker to provide a quote upon Exchange request), and 24.13 and Interpretation and Policy .03 (which the proposed rule change renumbers to .02). \10\ The proposed rule change makes corresponding changes to the following rules to change cross-references to Rule 7.12 to Rule 6.12B: Rules 6.12A, 6.18(d)(i), and 6.20(a). \11\ Chapter VI, Section E describes Exchange responsibilities pursuant to the current linkage plan, the Options Order Protection and Locked/Crossed Market Plan. --------------------------------------------------------------------------- Autoquote. Autoquote was an Exchange electronic quotation system that automatically monitored and updated market quotes using a mathematical formula measuring certain characteristics of the option and underlying interest. Rules related to LMMs and DPMs require them to provide continuous electronic quotes in appointed classes using Autoquote or a proprietary automated quotation updating system. Currently, all Market-Makers that submit electronic quotes use a proprietary system, and Autoquote is no longer used. The proposed rule change deletes Rule 8.7, Interpretation and Policy .07, which describes Autoquote, as well as the requirement of LMMs and DPMs to provide electronic quotes, which requirement is included in Rules 8.15 and 8.85, respectively.\12\ --------------------------------------------------------------------------- \12\ The proposed rule change also deletes references to Autoquote in Rules 6.43(b), 8.15(c), 8.51(c)(1)(a)(iii), 8.60 Interpretation and Policy .02. Rules 8.7, Interpretation and Policy .07, 8.15(c), and 8.85(a)(x) provide components of a formulate used for automated quoting by Market-Makers using proprietary automated quoting systems will be disclosed unless the Exchange exempts them from disclosing this information. For competitive reasons, the Exchange exempts all Market-Makers from disclosing this information, so the proposed rule change deletes those provisions. --------------------------------------------------------------------------- S&P 100 Modified Opening Rotation. Rule 24.13, Interpretation and Policy .02 provides a modified opening rotation that the Exchange may use for S&P 100 options, but the rule also provides the Exchange with the authority to open this class using HOSS pursuant to Rule 6.2B. The Exchange currently uses HOSS to open S&P 100 options, and does not intend to use the modified opening in the future. Therefore, this provision no longer applies to the opening of S&P 100 options.\13\ --------------------------------------------------------------------------- \13\ The proposed rule change also renumbers current Interpretation and Policy .03 to .02. --------------------------------------------------------------------------- Rule 8.7(c)--Market-Maker Entry into Trading Station in Unappointed Class other than As Floor Broker. Rule 8.7(c) states whenever a Market-Maker enters the trading station for a class of options contracts in a class in which it is not appointed, in other than a floor brokerage capacity, the Market-Maker must fulfill obligations established in Rule 8.7(b) and, for the rest of the trading day, as well as undertake certain additional obligations. This rule text essentially requires a Market-Maker to act like a Market-Maker when it enters a trading station in the capacity of a Market-Maker in an unappointed class. However, pursuant to Rule 8.3, on the trading floor, Market-Makers have an appointment to trade in all hybrid classes, so if it goes to any trading station on the floor as a Market- Maker, it has an appointment for the classes at that station and is subject to Market-maker obligations. That provision, in conjunction with the restriction on acting as a Market-Maker and Floor Broker on the same day, make the provision in Rule 8.7(c) unnecessary and duplicative. Therefore, the proposed rule change deletes this provision. Chapter XXIVA--Flexible Exchange Options (``FLEX Options''). When the Exchange began offering FLEX Options for trading, FLEX Options traded pursuant to Rule XXIVA on the trading floor. The Exchange then developed the FLEX Hybrid Trading System on which FLEX Options could trade both on the trading floor and electronically. Chapter XXIVB describes FLEX Options trading on this system, and provides the Exchange with ability to permit FLEX trading pursuant to Chapter XXIVA or XXIVB. The open outcry rules in Chapter XXIVA are substantially similar to those in Chapter XXIVB. The Exchange has determined all FLEX trading must occur on the FLEX Hybrid Trading System pursuant to Chapter XXIVB. Therefore, Chapter XXIVB no longer applies to the trading of any FLEX Options.\14\ --------------------------------------------------------------------------- \14\ The proposed rule change also deletes references to Chapter XXIVA in the following rules: Rules 3.2(b), 5.9, 6.1A(c), 6.20A, Interpretation and Policy .05, 6.49A(c)(6), Introduction to Chapter XX, 20.12, Introduction to Chapter XXII, 22.16, Introduction to Chapter XXIVB, 24B.3, 28.17, 29.18, and Introduction to Chapter XXIX. --------------------------------------------------------------------------- Chapter XXVI--Market Baskets. Chapter XXVI describes rules applicable to market basket contracts, which are contracts obligating the seller to sell and the purchaser to purchase a designated number of shares of each of the stocks comprising the index on which the market basket is based. The Exchange currently does not list, and does not intend to list in the future, market basket contracts for trading. Therefore, Chapter XXVI no longer applies to any options trading on the Exchange.\15\ --------------------------------------------------------------------------- \15\ The proposed rule change also deletes references to market baskets and the rules proposed to be deleted in: Rules 8.8, Interpretation and Policy .02 and 24B.10 (which is proposed to be renumbered as 24A.10). --------------------------------------------------------------------------- Chapter XXVII--Buy-Write Option Unitary Derivatives (``BOUNDS''). Chapter XXVIII describes rules applicable to BOUNDS, which are securities issued, or subject to issuance, by the Options Clearing Corporation pursuant to its rules, which gives holders and writers thereof such rights and obligations as may be provided in its rules. The Exchange currently does not list, and does not intend to list in the future, BOUNDS for trading. Therefore, Chapter XXVII no longer applies to any options trading on the Exchange. Chapter XXXI--Approval of Securities for Original Listing. Chapter XXXI describes rules pursuant to which the Exchange may list equity securities for listing on the Exchange. The Exchange currently does not list any equity securities on the Exchange. Therefore, Chapter XXXI currently applies to no securities listed on the Exchange.\16\ --------------------------------------------------------------------------- \16\ Options may be listed for trading on the Exchange pursuant to Chapter V and XXIV. The proposed rule change leaves a placeholder in Chapters XXX and XXXI for rules related to listing and trading of equity securities. The Exchange would file a proposed rule change to adopt new rules if it determines to list and trade equity securities in the future. --------------------------------------------------------------------------- Section 957 of the Dodd-Frank adopted Section 6(b)(10) of the Act,\17\ which requires the rules of each national securities exchange to prohibit any member that is not the beneficial owner of a security registered under Section 12 of the Act \18\ from granting a proxy to vote the security in connection [[Page 3375]] with certain shareholder votes, unless the beneficial owner of the security has instructed the member to vote the proxy in accordance with the voting instructions of the beneficial owner. The shareholder votes covered by Section 957 include any vote with respect to (1) the election of a member of the board of directors of an issuer (except for a vote with respect to the uncontested election of a member of the board of directors of any investment company registered under the Investment Company Act of 1940 (the ``Investment Company Act''), (2) executive compensation, or (3) any other significant matter, as determined by the Commission, by rule.\19\ --------------------------------------------------------------------------- \17\ 15 U.S.C. 78f(b)(10). \18\ 15 U.S.C. 78l. \19\ 15 U.S.C. 78f(b)(10)(B). --------------------------------------------------------------------------- Rules 31.82 through 31.88 currently include provisions that cover these proxy voting requirements with respect to Trading Permit Holders. However, because this proposed rule change deletes Chapter XXXI, the proposed rule change adds Rule 4.25 to retain these provisions in accordance with Section 957. Chapters XL through XLIX--Screen-Based Trading. Chapters XL through XLIX describe trading on the Exchange's screen-based trading system. The screen-based trading system is no longer used, as all options trading on the Exchange trade on the Hybrid Trading System. Therefore, the screen-based trading rules no longer apply to any options listed for trading on the Exchange.\20\ --------------------------------------------------------------------------- \20\ The proposed rule change makes corresponding changes to the following rules to delete references to screen-based trading and the rules proposed to be deleted: Rules 1.1(fff) and (ggg), 3.2(b), and 3.3. --------------------------------------------------------------------------- Chapters L through LIV--CBOE Stock Exchange (``CBSX''). Chapters L through LIV describe trading on CBSX, which is the Exchange's facility for trading stocks, warrants, IPRs, IPSs, and Trust Issued Receipts (non-options securities). CBSX ceased market operations on April 30, 2014. Therefore, the CBSX rules no longer apply to any trading on the Exchange.\21\ The Exchange would file a proposed rule change to adopt new rules if it determines to list and trade non- options securities in the future. --------------------------------------------------------------------------- \21\ The proposed rule change makes corresponding changes to the following rules to delete references to CBSX and the rules proposed to be deleted: Rules 3.1A, 3.2(b), 3.3, and 6.20A, Interpretation and Policy .01. --------------------------------------------------------------------------- Additional Nonsubstantive Changes In addition to nonsubstantive changes described above, the proposed rule change makes the following nonsubstantive changes: The proposed rule change moves Interpretation and Policy .01 to the definition of Professional in Rule 1.1(ggg) to Interpretation and Policy .06 to Rule 1.1, so that all Interpretations and Policies to Rule 1.1 are in the same place. Currently, there are two paragraphs erroneously lettered as (mmm) and (ppp). The proposed rule change corrects this lettering and updates the paragraph lettering to reflect these corrections. The proposed rule change makes updates throughout the rules to conform paragraph lettering and numbering to other rules, as well as to reflect deleted rule provisions. Rule 6.2, Interpretation and Policy .01(b) and (c) erroneously refer to LMMs as LLMs. The proposed rule change corrects those erroneous references. The proposed rule change amends Rule 6.43(b) to indicate it only applies to Hybrid 3.0 classes, which is consistent with the current rule text and current trading practices. Renumber Chapter XXIVB and the rules in that chapter to Chapter XXIVA, and update cross-references throughout the rules. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.\22\ Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \23\ 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. Additionally, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \24\ requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \22\ 15 U.S.C. 78f(b). \23\ 15 U.S.C. 78f(b)(5). \24\ Id. --------------------------------------------------------------------------- In particular, by deleting rules that no longer apply to Cboe Options trading (which rules have generally not been applicable in years), and making other nonsubstantive changes to better organize and more consistently number and letter rules, the rules will more clearly identify currently applicable rules, which the Exchange believes removes impediments to and perfects the mechanism of a free and open market. The Exchange believes the proposed rule change will eliminate confusion regarding which rules apply to current trading, which ultimately protects investors and the public interest. The proposed rule change has no impact on current trading on Cboe Options. B. Self-Regulatory Organization's Statement on Burden on Competition Cboe Options 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 proposed rule change deletes rules that no longer apply to Cboe Options trading and makes other nonsubstantive changes, and thus has no impact on current trading on Cboe Options. Therefore, the proposed rule change has no impact on competition. The proposed rule change eliminates confusion with respect to rules applicable to current trading on Cboe Options. 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 Because the foregoing proposed rule change does not: A. Significantly affect the protection of investors or the public interest; B. impose any significant burden on competition; and C. become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act \25\ and Rule 19b-4(f)(6) \26\ thereunder.\27\ At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if [[Page 3376]] 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. --------------------------------------------------------------------------- \25\ 15 U.S.C. 78s(b)(3)(A). \26\ 17 CFR 240.19b-4(f)(6). \27\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file 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 requirement. --------------------------------------------------------------------------- IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-CBOE-2018-003 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-2018-003. 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-2018-003 and should be submitted on or before February 14, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\28\ --------------------------------------------------------------------------- \28\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-01206 Filed 1-23-18; 8:45 am] BILLING CODE 8011-01-P
![3372 Federal Register / Vol. 83, No. 16 / Wednesday, January 24, 2018 / Notices
business combination. The proposed SECURITIES AND EXCHANGE Exchange and to make other
rule change was published for comment COMMISSION nonsubstantive changes to the Rules.
in the Federal Register on December 6, Deletion of Rules
[Release No. 34–82529; File No. SR–CBOE–
2017.4 The Commission received two
2018–003] The Exchange proposes to delete the
comments on the proposal.5
following rules and chapters from its
Section 19(b)(2) of the Act 6 provides Self-Regulatory Organizations; Cboe rulebook:
that within 45 days of the notice Exchange, Inc.; Notice of Filing and • Rule 2.40—Market-Maker
publication of the filing of a proposed Immediate Effectiveness of a Proposed Surcharge for Brokerage. Rule 2.40
rule change, or within such longer Rule Change To Delete Obsolete Rules operated as a pilot program until March
period up to 90 days as the Commission January 18, 2018. 30, 2000, at which time the program
may designate if it finds such longer expired (and the Exchange did not
Pursuant to Section 19(b)(1) of the
period to be appropriate and publishes request renewal). The Exchange does
Securities Exchange Act of 1934
its reasons for so finding, or as to which not impose a surcharge on Market-
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
the self-regulatory organization Maker transactions pursuant to this rule.
notice is hereby given that on January 3,
consents, the Commission shall either Any fees and rebates applicable to any
2018, Cboe Exchange, Inc. (the
approve the proposed rule change, Market-Maker transactions are included
‘‘Exchange’’ or ‘‘Cboe Options’’) filed
disapprove the proposed rule change, or in the Cboe Options Fees Schedule.
with the Securities and Exchange • Rule 6.2—Trading Rotations. Rule
institute proceedings to determine Commission (‘‘Commission’’) the 6.2 states the Exchange may use the
whether the proposed rule change proposed rule change as described in procedures described in current Rules
should be disapproved. The 45th day Items I and II below, which Items have 6.2, 6.2A, or 6.2B to conduct trading
after publication of the notice for this been prepared by the Exchange. The rotations in all options listed on the
proposed rule change is January 20, Commission is publishing this notice to Exchange. Currently, the Exchange only
2018. The Commission is extending this solicit comments on the proposed rule uses the procedures set forth in current
45-day time period. change from interested persons. Rule 6.2B to conduct trading rotations,
The Commission finds it appropriate I. Self-Regulatory Organization’s and no longer conducts trading rotations
to designate a longer period within Statement of the Terms of Substance of pursuant to current Rule 6.2. Therefore,
which to take action on the proposed the Proposed Rule Change this provision no longer applies to
rule change so that it has sufficient time trading on the Exchange.3
The Exchange proposes to delete • Rule 6.2A—Rapid Opening System
to consider the proposal and the Rules that no longer apply to the
comment letters. Accordingly, the (‘‘ROS’’). The Exchange used ROS prior
Exchange and make other to open options prior to implementation
Commission, pursuant to Section nonsubstantive changes to the Rules. of the Exchange’s Hybrid Trading
19(b)(2) of the Act,7 designates March 6, The text of the proposed rule change is System, which includes the Hybrid 3.0
2018, as the date by which the available on the Exchange’s website Platform. Currently, all options listed on
Commission shall either approve or (http://www.cboe.com/AboutCBOE/ the Exchange trade on its Exchange’s
disapprove, or institute proceedings to CBOELegalRegulatoryHome.aspx), at Hybrid Trading System. As stated in
determine whether to disapprove, the the Exchange’s Office of the Secretary, Rule 6.2A, ROS does not apply to series
proposed rule change (File No. SR– and at the Commission’s Public trading on the Hybrid Trading System,
NYSE–2017–53). Reference Room. which open on the Cboe Options Hybrid
For the Commission, by the Division of II. Self-Regulatory Organization’s Opening System (‘‘HOSS’’) (pursuant to
Trading and Markets, pursuant to delegated Statement of the Purpose of, and Rule 6.2B). Therefore, Rule 6.2A no
authority.8 Statutory Basis for, the Proposed Rule longer applies to any options listed for
Eduardo A. Aleman, Change trading on the Exchange.4
• Rules 6.8—RAES Operations and
Assistant Secretary. In its filing with the Commission, the 6.9—Automatic ORS Order Execution
[FR Doc. 2018–01208 Filed 1–23–18; 8:45 am] Exchange included statements Against Booked Orders. The Exchange’s
BILLING CODE 8011–01–P concerning the purpose of and basis for Retail Automatic Execution System
the proposed rule change and discussed (‘‘RAES’’) was an automated execution
any comments it received on the system feature of the Exchange’s Order
proposed rule change. The text of these Routing System (‘‘ORS’’) operated by
statements may be examined at the the Exchange and that provided
places specified in Item IV below. The automated order execution and
Exchange has prepared summaries, set reporting services for options. RAES and
forth in sections A, B, and C below, of ORS are no longer used, as all options
the most significant aspects of such
statements. 3 The proposed rule change makes corresponding
changes to the following rules to delete references
4 See Securities Exchange Act Release No. 82180
A. Self-Regulatory Organization’s to ROS and the rule proposed to be deleted: Rules
Statement of the Purpose of, and 6.6, 6.18, 6.25(b)(1), 6.73(c), 8.60(c)(7) and
(November 30, 2017), 82 FR 57632 (December 6, Interpretation and Policy .02, 21.11, 22.11, and
2017) (‘‘Notice’’).
Statutory Basis for, the Proposed Rule
24.13.
Change
daltland on DSKBBV9HB2PROD with NOTICES
5 See Letters to Brent J. Fields, Secretary, 4 The proposed rule change makes corresponding
Commission, from Michael Kitlas, dated November 1. Purpose changes to the following rules to delete references
30, 2017 (‘‘Kitlas Letter’’) and Jeffrey P. Mahoney, to ROS and the rule proposed to be deleted: Rules
General Counsel, Council of Institutional Investors, The purpose of this rule change is to 1.1(fff) and (ggg), 6.2, 6.6, 6.18, 6.25(b)(1), 8.60(c)(7)
dated December 20, 2017 (‘‘CII Letter’’). delete Rules that no longer apply to the and Interpretation and Policy .02, 22.11, 24.13.
6 15 U.S.C. 78s(b)(2).
Because the proposed rule change deletes both
Rules 6.2 and 6.2A, the proposed rule change also
7 Id. 1 15 U.S.C. 78s(b)(1). renumbers Rule 6.2B to be Rule 6.2, and makes
8 17 CFR 200.30–3(a)(31). 2 17 CFR 240.19b–4. corresponding changes throughout the Rules.
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![3376 Federal Register / Vol. 83, No. 16 / Wednesday, January 24, 2018 / Notices
it appears to the Commission that such to make available publicly. All Commission has received one comment
action is necessary or appropriate in the submissions should refer to File letter to the Proposed Rule Change.5
public interest, for the protection of Number SR–CBOE–2018–003 and Section 19(b)(2) of the Act 6 provides
investors, or otherwise in furtherance of should be submitted on or before that, within 45 days of the publication
the purposes of the Act. If the February 14, 2018.
of notice of the filing of a proposed rule
Commission takes such action, the For the Commission, by the Division of change, or within such longer period up
Commission will institute proceedings Trading and Markets, pursuant to delegated
to determine whether the proposed rule to 90 days as the Commission may
authority.28
change should be approved or designate if it finds such longer period
Eduardo A. Aleman,
disapproved. to be appropriate and publishes its
Assistant Secretary.
reasons for so finding, or as to which the
IV. Solicitation of Comments [FR Doc. 2018–01206 Filed 1–23–18; 8:45 am]
self-regulatory organization consents,
BILLING CODE 8011–01–P
Interested persons are invited to the Commission shall either approve the
submit written data, views, and proposed rule change, disapprove the
arguments concerning the foregoing, proposed rule change, or institute
SECURITIES AND EXCHANGE
including whether the proposed rule proceedings to determine whether the
COMMISSION
change is consistent with the Act. proposed rule change should be
Comments may be submitted by any of [Release No. 34–82534; File No. SR–OCC– disapproved. The 45th day after
the following methods: 2017–022]
publication of the notice for this
Electronic Comments Self-Regulatory Organizations; The Proposed Rule Change is January 18,
• Use the Commission’s internet Options Clearing Corporation; Notice 2018. The Commission is extending this
comment form (http://www.sec.gov/ of Designation of Longer Period for 45-day time period.
rules/sro.shtml); or Commission Action on Proposed Rule In order to provide the Commission
• Send an email to rule-comments@ Change Related to The Options with sufficient time to consider the
sec.gov. Please include File Number SR– Clearing Corporation’s Margin Proposed Rule Change, the Commission
CBOE–2018–003 on the subject line. Methodology finds that it is appropriate to designate
Paper Comments January 18, 2018. a longer period within which to take
On November 13, 2017, The Options action on the Proposed Rule Change.
• Send paper comments in triplicate
to Secretary, Securities and Exchange Clearing Corporation (‘‘OCC’’) filed with Accordingly, the Commission,
Commission, 100 F Street NE, the Securities and Exchange pursuant to Section 19(b)(2) of the Act,7
Washington, DC 20549–1090. Commission (‘‘Commission’’) proposed designates March 4, 2018 as the date by
rule change SR–OCC–2017–022 which the Commission shall either
All submissions should refer to File
(‘‘Proposed Rule Change’’) pursuant to approve, disapprove, or institute
Number SR–CBOE–2018–003. This file
Section 19(b)(1) of the Securities proceedings to determine whether to
number should be included on the
Exchange Act of 1934 (‘‘Act’’),1 and
subject line if email is used. To help the disapprove proposed rule change SR–
Rule 19b–4 thereunder,2 related to
Commission process and review your OCC–2017–022.
OCC’s margin methodology.3 The
comments more efficiently, please use For the Commission, by the Division of
Proposed Rule Change was published
only one method. The Commission will Trading and Markets, pursuant to delegated
for comment in the Federal Register on
post all comments on the Commission’s authority.8
December 4, 2017.4 To date, the
internet website (http://www.sec.gov/
Eduardo A. Aleman,
rules/sro.shtml). Copies of the 28 17 CFR 200.30–3(a)(12).
submission, all subsequent 1 15
Assistant Secretary.
U.S.C. 78s(b)(1).
amendments, all written statements 2 17 CFR 240.19b–4. [FR Doc. 2018–01210 Filed 1–23–18; 8:45 am]
with respect to the proposed rule 3 On November 13, 2017, OCC also filed this BILLING CODE 8011–01–P
change that are filed with the proposal as advance notice SR–OCC–2017–811
(‘‘Advance Notice’’) with the Commission pursuant
Commission, and all written to Section 806(e)(1) of Title VIII of the Dodd-Frank
communications relating to the Wall Street Reform and Consumer Protection Act,
proposed rule change between the entitled the Payment, Clearing, and Settlement
Commission and any person, other than Supervision Act of 2010 (12 U.S.C. 5465(e)(1)) and
Rule 19b–4(n)(1)(i) of the Act (17 CFR 240.19b–
those that may be withheld from the 4(n)(1)(i)). Notice of filing of the Advance Notice
public in accordance with the was published for comment in the Federal Register
provisions of 5 U.S.C. 552, will be on December 26, 2017. Securities Exchange Act
Release No. 82355 (Dec. 19, 2017), 82 FR 61060
available for website viewing and (Dec. 26, 2017) (SR–OCC–2017–811).
printing in the Commission’s Public On January 11, 2018, the Commission sent OCC
Reference Room, 100 F Street NE, a request for additional information, which tolls the 5 See letter from Michael Kitlas, dated November
Washington, DC 20549 on official Commission’s 60-day review period for the 28, 2017, to Eduardo A. Aleman, Assistant
Advance Notice. See Memorandum from Office of
business days between the hours of Clearance and Settlement, Division of Trading and
Secretary, Commission, available at https://
10:00 a.m. and 3:00 p.m. Copies of the Markets, dated January 12, 2018, available at www.sec.gov/comments/sr-occ-2017-022/
filing also will be available for https://www.sec.gov/comments/sr-occ-2017-022/ occ2017022.htm. Since the proposal contained in
inspection and copying at the principal occ2017022.htm. The new review period will be 60 the Proposed Rule Change was also filed as an
daltland on DSKBBV9HB2PROD with NOTICES
days from the date the Commission receives the Advance Notice, the Commission is considering all
office of the Exchange. All comments information requested. See Section 806(e)(1). The public comments received on the proposal
received will be posted without change. proposal in the Proposed Rule Change and the regardless of whether the comments are submitted
Persons submitting comments are Advance Notice shall not take effect until all to the Proposed Rule Change or the Advance
cautioned that we do not redact or edit regulatory actions required with respect to the Notice.
proposal are completed.
personal identifying information from 4 Securities Exchange Act Release No. 82161
6 15 U.S.C. 78s(b)(2).
comment submissions. You should (Nov. 28, 2017), 82 FR 57306 (Dec. 4, 2017) (SR–
7 Id.
submit only information that you wish OCC–2017–022). 8 17 CFR 200.30–3(a)(31).
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Document Created: 2018-10-26 09:59:00
Document Modified: 2018-10-26 09:59:00
| 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 3372 |
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