83 FR 43946 - Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 5.5A, Select Provisions of Options Listing Procedures Plan, 5.8, Long-Term Equity Option Series (LEAPS) and Rule 24.9, Terms of Index Option Contracts
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 167 (August 28, 2018)
Federal Register Volume 83, Issue 167 (August 28, 2018)
| Page Range | 43946-43949 | |
| FR Document | 2018-18574 |
[Federal Register Volume 83, Number 167 (Tuesday, August 28, 2018)] [Notices] [Pages 43946-43949] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-18574] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83909; File No. SR-CBOE-2018-061] Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 5.5A, Select Provisions of Options Listing Procedures Plan, 5.8, Long-Term Equity Option Series (LEAPS) and Rule 24.9, Terms of Index Option Contracts August 22, 2018. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on August 20, 2018, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') filed with the Securities and Exchange Commission (the ``Commission'') the proposed rule change as described in Items I 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. --------------------------------------------------------------------------- \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). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rules 5.5A, 5.8, and 24.9. (additions are italicized; deletions are [bracketed]) * * * * * Rules of Cboe Exchange, Inc. * * * * * Rule 5.5A. Select Provisions of Options Listing Procedures Plan (a) No change. (b) The exercise price of each option series listed by the Exchange shall be fixed at a price per share which is reasonably close to the price of the underlying equity security, Exchange Traded Fund (``ETF'' and referred to as a ``Unit'' in Rule 5.3) or Trust Issued Receipt (``TIR'') at or about the time the Exchange determines to list such series. Additionally, (i) Exercise Price Range Limitations--Except as provided in subparagraphs (ii) through (iv) below, if the price of the underlying security is less than or equal to $20, the Exchange shall not list new option series with an exercise price more than 100% above or below the price of the underlying security. However, the foregoing restriction shall not prohibit the listing of at least three exercise prices per expiration month in an option class. Except as provided in Rule 5.5(d)(4), if the price of the underlying security is greater than $20, the Exchange shall not list new option series with an exercise price more than 50% above or below the price of the underlying security. The price of the underlying security is measured by: (1) For intra-day add-on series and next-day series additions, the daily high and low of all prices reported by all national securities exchanges; (2) for new expiration months, the daily high and low of all prices reported by all national securities exchanges on the day the Exchange determines its preliminary notification of new series; [and] (3) for option series to be added as a result of pre-market trading, the most recent share price reported by all national securities exchanges between 7:45 a.m. and 8:30 a.m. (Chicago time)[.]; and (4) for option series to be added based on trading following regular trading hours, the most recent share price reported by all national securities exchanges between 3:15 p.m. and 5:00 p.m. (Chicago time). (ii)-(vi) No change. * * * * * Rule 5.8. Long-Term Equity Option Series (LEAPS) (a) No change. (b) [When a new equity LEAPS series is listed, such series will be opened for trading either when there is buying or selling interest, or 40 minutes prior to the close, whichever occurs first. No quotations will be posted for such option series until they are opened for trading. (c)] With regard to the listing of new January LEAPS series on equity option classes, options on Exchange Traded Funds (``ETFs'' and referred to as ``Units'' in Rule 5.3), or options on Trust Issued Receipts (``TIRs''), the Exchange shall not add new LEAP series on a currently listed and traded option class earlier than the Monday prior to the September expiration (which is 28 months before the expiration)[: (i) Earlier than September (which is 28 months before the expiration), for an option class on the January expiration cycle; (ii) Earlier than October (which is 27 months before expiration), for an option class on the February expiration cycle; and (iii) Earlier than November (which is 26 months before expiration), for an option class on the March expiration cycle]. Pursuant to the Options Listing Procedures Plan, exchanges that list and trade the same equity option class, ETF option class, or TIR option class are authorized to jointly determine and coordinate with the Clearing Corporation on the date of introduction of new LEAP series for that option class consistent with this paragraph ([c]b). ([d]c) The Exchange shall not list new LEAP series on equity option classes, options on ETFs, or options on TIRs in a new expiration year if the national average daily contract volume, excluding LEAP and FLEX series, for that option class during the preceding three calendar months is less than 1,000 contracts, unless the new LEAP series has an expiration year that has already been listed on another exchange for that option class. The preceding volume threshold does not apply during the first six months an equity option class, option on an ETF, or option on a TIR is listed on any exchange. * * * * * Rule 24.9. Terms of Index Option Contracts (a) No change. (b) Long-Term Index Option Series (``LEAPS''). (1) Notwithstanding the provisions of Paragraph (a)(2) above, the Exchange may list long-term index option series that expire from 12 to 180 months from the date of issuance. (A) Index LEAPS may be based on either the full or reduced value of the underlying index. (B) There may be up to 10 expiration months, none further out than one-hundred eighty (180) months. [(B) When a new Index LEAPS series is listed, such series will be opened for trading either when there is buying or selling interest, or 40 minutes prior to the close, whichever occurs first. No quotations will be posted for such [[Page 43947]] option series until they are opened for trading.] (2) No change. (c)-(e) No change. . . . Interpretations and Policies: .01-.14 No change. * * * * * The text of the proposed rule change is also available on the Exchange's website (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the Secretary, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this proposed rule change is to amend Rules 5.5A, 5.8, and 24.9 to conform to recently approved changes to the Options Listing Procedures Plan (``OLPP'').\5\ The Exchange, which is one of the Participant Exchanges \6\ to the OLPP, currently has rules that are designed to incorporate the requirements of the OLPP. All Participant Exchanges have similar such (essentially uniform) rules to ensure consistency and compliance with the OLPP. The Exchange proposes to modify such rules to reflect the recent updates as described below. --------------------------------------------------------------------------- \5\ See Securities Exchange Act Release Nos. 82235 (December 7, 2017), 82 FR 58668 (December 13, 2017) (order approving the Fourth Amendment to the OLPP); 81893 (October 18, 2017), 82 FR 49249 (``OLPP Notice''). \6\ In addition to the Exchange, the ``Participant Exchanges'' are: Box Options Exchange, LLC; Cboe BZX Exchange, Inc.; Cboe C2 Exchange, Inc.; Cboe EDGX Exchange, Inc.; Miami International Securities Exchange, LLC; MIAX PEARL, LLC; Nasdaq BX, Inc.; Nasdaq GEMX, LLC; Nasdaq ISE, LLC; Nasdaq MRX, LLC; Nasdaq Options Market, LLC; Nasdaq PHLX, LLC; NYSE American, LLC; and NYSE Arca, Inc. --------------------------------------------------------------------------- Addition of Long-Term Equity Options (``LEAPS'') First, the OLPP has been amended to change the earliest date on which new January LEAPS on equity options, options on Exchange Traded Funds (``ETF''), or options on Trust Issued Receipts (``TIR'') may be added to a single date (from three separate months). As noted in the OLPP Notice, in the past, there were operational concerns related to adding new January LEAPs series for all options classes on which LEAPs were listed on a single trading day.\7\ And, the addition of new series in a pre-electronic trading environment was a manual process. To accommodate this, the addition of new January LEAPs series was spread across three months (September, October, and November). Today, however, these operational concerns related to January LEAPs have been alleviated as new series can be added in bulk electronically. The Plan Participants, including the Exchange, believe that moving the addition of new January LEAPs series to no earlier than the Monday prior to the September expiration would reduce marketplace confusion about available January LEAPs series. Where previously January LEAPs series for options classes on the February or March expiration cycles would not have been available as early as January LEAPs series for options classes on the January expiration cycle, under the proposed change, all January LEAPs series will be available concurrently. Accordingly, to conform to this change, the Exchange proposes to modify current Rule 5.8(c) to reflect that new January LEAPS series on equity options classes, options on ETFs, or options on TIRs, may not be added on a currently listed and traded option class earlier than the Monday prior to the September expiration (which is 28 months before the expiration).\8\ --------------------------------------------------------------------------- \7\ See OLPP Notice at 49249. \8\ See proposed Rule 5.8(b). --------------------------------------------------------------------------- Addition of Equity, ETF, and TIR Option Series After Regular Trading Hours Second, the OLPP has been amended to allow equity, ETF, and TIR option series to be added based on trading after regular trading hours (i.e., after-market). As noted in the OLPP Notice, the prior version of the OLPP did not allow for option series to be added based on trading following regular trading hours.\9\ As such, the Exchange Participants were are unable to add new option series that may result from trading following regular trading hours until the next morning, depending on the range of prices in pre-market trading, which is significant because events that occur after regular trading hours, such as earnings releases, often have an important impact on the price of an underlying security. In addition, there are operational difficulties for market participants throughout the industry adding series after system startup. To avoid the potential burden that would result from the inability to add series as a result of trading following regular trading hours, the OLPP was amended to allow an additional category by which the price of an underlying security may be measured. Specifically, to conform to the amended OLPP, the Exchange proposes to add subparagraph (b)(i)(4) to Rule 5.5A to provide that ``for option series to be added based on trading following regular trading hours,'' the price of the underlying security is measured by ``the most recent share price reported by all national securities exchanges between 3:15 p.m. and 5:00 p.m. (Chicago time).'' \10\ --------------------------------------------------------------------------- \9\ See OLPP Notice at 49250. \10\ See proposed Rule 5.5A(b)(i)(4). The Exchange proposes to relocate ``and'' from subparagraph (2) to (3) to conform to the change. See proposed Rule 5.5A(b)(i)(2) and (3). --------------------------------------------------------------------------- Technical Changes The Exchange proposes to modify Rules to delete now obsolete operational language, which dates back to when LEAPs were first adopted. This language provides that when a new equity or index LEAPS series, as applicable, is listed, such series will be opened for trading either when there is buying or selling interest, or 40 minutes prior to the close, whichever occurs first. No quotations will be posted for such option series until they are opened for trading. The Exchange proposes to delete this language because when this language was adopted, LEAPs were not opened for trading until late in the trading day unless there was buying or selling interest.\11\ Today, however, technological improvements allow the Exchange to open all LEAP series at the same time as all other series in an option class. --------------------------------------------------------------------------- \11\ See current Rules 5.8(b) and 24.9(b)(1)(B). The proposed rule change amends a cross-reference to current Rule 5.8(c) (proposed Rule 5.8(b)), and changes current Rule 5.8(d) to proposed Rule 5.8(c), to conform to the deletion of current Rule 5.8(b). See proposed Rule 5.8(b) and (c). The proposed rule change splits current Rule 24.9(b)(1)(A) into two provisions (proposed Rule 24.9(b)(1)(A) and (B)) to separate two different rule provisions. See proposed Rule 24.9(b)(1). --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the [[Page 43948]] 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.\12\ Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \13\ 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) \14\ requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78f(b). \13\ 15 U.S.C. 78f(b)(5). \14\ Id. --------------------------------------------------------------------------- In particular, the proposed rule change, which conforms to the recently adopted provisions of the OLPP, as amended, allows the Exchange to continue to list extended far term option series that have been viewed as beneficial to traders, investors and public customers. Accordingly, the Exchange believes that the proposal is consistent with the Act because it will allow the Exchange to list all January 2021 expiration series on the Monday prior to the September 2018 expiration. Moreover, this change would simplify the process for adding new January LEAP options series and reduce potential for investor confusion because all new January LEAP options would be made available beginning at the same time, consistent with the amended OLPP. The Exchange notes that this proposal does not propose any new provisions that have not already been approved by the Commission in the amended OLPP, but instead maintains series listing rules that conform to the amended OLPP. The proposal to permit series to be added based on after-market trading is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanisms of a free and open market and a national market system, by allowing the Exchange to make series available for trading with reduced operational difficulties. The Exchange notes that this proposed change, which is consistent with the amended OLPP should provide market participants with earlier notice regarding what options series will be available for trading the following day, and should help to enhance investors' ability to plan their options trading. The Exchange also believes that the proposed technical changes, including deleting obsolete language and reorganizing and consolidating the rule, promote just and equitable principles of trade, foster cooperation and coordination with persons engaged in facilitating transactions in securities, and remove impediments to and perfect the mechanism of a free and open market and a national market system. 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. Specifically, the Exchange believes that by conforming Exchange rules to the amended OLPP, the Exchange would promote regulatory clarity and consistency, thereby reducing burdens on the marketplace and facilitating investor protection. The Exchange believes that adopting rules, which it anticipates will likewise be adopted by Participant Exchanges, would allow for continued competition between Exchange market participants trading similar products as their counterparts on other exchanges, while at the same time allowing the Exchange to continue to compete for order flow with other exchanges in option issues. 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 \15\ and Rule 19b-4(f)(6) thereunder.\16\ 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.\17\ --------------------------------------------------------------------------- \15\ 15 U.S.C. 78s(b)(3)(A)(iii). \16\ 17 CFR 240.19b-4(f)(6). \17\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and 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 requirement. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \18\ normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b4(f)(6)(iii),\19\ 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 notes that the Exchange's proposal would conform the Exchange's rules to the amended OLPP, which the Commission previously approved.\20\ Accordingly, the Commission believes that the proposal raises no new or novel regulatory issues and waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. The Commission therefore waives the 30-day operative delay and designates the proposed rule change to be operative upon filing.\21\ --------------------------------------------------------------------------- \18\ 17 CFR 240.19b-4(f)(6). \19\ 17 CFR 240.19b-4(f)(6)(iii). \20\ See OLPP Notice, supra note 5. \21\ For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- 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) \22\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \22\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- IV. Solicitation of Comments Interested persons are invited to submit written data, views, and [[Page 43949]] arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-CBOE-2018-061 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-2018-061. 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-SR-CBOE-2018-061 and should be submitted on or before September 18, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\23\ --------------------------------------------------------------------------- \23\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-18574 Filed 8-27-18; 8:45 am] BILLING CODE 8011-01-P
![43946 Federal Register / Vol. 83, No. 167 / Tuesday, August 28, 2018 / Notices
submissions should refer to File (b) The exercise price of each option Funds (‘‘ETFs’’ and referred to as
Number SR–NYSENAT–2018–19 and series listed by the Exchange shall be ‘‘Units’’ in Rule 5.3), or options on Trust
should be submitted on or before fixed at a price per share which is Issued Receipts (‘‘TIRs’’), the Exchange
September 18, 2018. reasonably close to the price of the shall not add new LEAP series on a
For the Commission, by the Division of underlying equity security, Exchange currently listed and traded option class
Trading and Markets, pursuant to delegated Traded Fund (‘‘ETF’’ and referred to as earlier than the Monday prior to the
authority.16 a ‘‘Unit’’ in Rule 5.3) or Trust Issued September expiration (which is 28
Eduardo A. Aleman, Receipt (‘‘TIR’’) at or about the time the months before the expiration)[:
Assistant Secretary. Exchange determines to list such series. (i) Earlier than September (which is
[FR Doc. 2018–18571 Filed 8–27–18; 8:45 am]
Additionally, 28 months before the expiration), for an
(i) Exercise Price Range Limitations— option class on the January expiration
BILLING CODE 8011–01–P
Except as provided in subparagraphs (ii) cycle;
through (iv) below, if the price of the (ii) Earlier than October (which is 27
SECURITIES AND EXCHANGE underlying security is less than or equal months before expiration), for an option
COMMISSION to $20, the Exchange shall not list new class on the February expiration cycle;
option series with an exercise price and
[Release No. 34–83909; File No. SR–CBOE– more than 100% above or below the (iii) Earlier than November (which is
2018–061] price of the underlying security. 26 months before expiration), for an
However, the foregoing restriction shall option class on the March expiration
Self-Regulatory Organizations; Cboe
not prohibit the listing of at least three cycle].
Exchange, Inc.; Notice of Filing and Pursuant to the Options Listing
Immediate Effectiveness of a Proposed exercise prices per expiration month in
an option class. Except as provided in Procedures Plan, exchanges that list and
Rule Change To Amend Rule 5.5A, trade the same equity option class, ETF
Select Provisions of Options Listing Rule 5.5(d)(4), if the price of the
underlying security is greater than $20, option class, or TIR option class are
Procedures Plan, 5.8, Long-Term authorized to jointly determine and
Equity Option Series (LEAPS) and Rule the Exchange shall not list new option
series with an exercise price more than coordinate with the Clearing
24.9, Terms of Index Option Contracts Corporation on the date of introduction
50% above or below the price of the
August 22, 2018. underlying security. of new LEAP series for that option class
Pursuant to Section 19(b)(1) of the The price of the underlying security is consistent with this paragraph ([c]b).
Securities Exchange Act of 1934 (the measured by: ([d]c) The Exchange shall not list new
‘‘Act’’),1 and Rule 19b–4 thereunder,2 (1) For intra-day add-on series and LEAP series on equity option classes,
notice is hereby given that on August next-day series additions, the daily high options on ETFs, or options on TIRs in
20, 2018, Cboe Exchange, Inc. (the and low of all prices reported by all a new expiration year if the national
‘‘Exchange’’ or ‘‘Cboe Options’’) filed national securities exchanges; average daily contract volume,
with the Securities and Exchange (2) for new expiration months, the excluding LEAP and FLEX series, for
Commission (the ‘‘Commission’’) the daily high and low of all prices reported that option class during the preceding
proposed rule change as described in by all national securities exchanges on three calendar months is less than 1,000
Items I and II below, which Items have the day the Exchange determines its contracts, unless the new LEAP series
been prepared by the Exchange. The preliminary notification of new series; has an expiration year that has already
Exchange filed the proposal as a ‘‘non- [and] been listed on another exchange for that
controversial’’ proposed rule change (3) for option series to be added as a option class. The preceding volume
pursuant to Section 19(b)(3)(A)(iii) of result of pre-market trading, the most threshold does not apply during the first
the Act 3 and Rule 19b–4(f)(6) recent share price reported by all six months an equity option class,
thereunder.4 The Commission is national securities exchanges between option on an ETF, or option on a TIR
publishing this notice to solicit 7:45 a.m. and 8:30 a.m. (Chicago is listed on any exchange.
comments on the proposed rule change time)[.]; and * * * * *
from interested persons. (4) for option series to be added based
on trading following regular trading Rule 24.9. Terms of Index Option
I. Self-Regulatory Organization’s hours, the most recent share price Contracts
Statement of the Terms of Substance of reported by all national securities (a) No change.
the Proposed Rule Change exchanges between 3:15 p.m. and 5:00 (b) Long-Term Index Option Series
The Exchange proposes to amend p.m. (Chicago time). (‘‘LEAPS’’).
Rules 5.5A, 5.8, and 24.9. (ii)–(vi) No change. (1) Notwithstanding the provisions of
(additions are italicized; deletions are * * * * * Paragraph (a)(2) above, the Exchange
[bracketed]) may list long-term index option series
Rule 5.8. Long-Term Equity Option that expire from 12 to 180 months from
* * * * * Series (LEAPS) the date of issuance.
Rules of Cboe Exchange, Inc. (a) No change. (A) Index LEAPS may be based on
(b) [When a new equity LEAPS series either the full or reduced value of the
* * * * * is listed, such series will be opened for underlying index.
Rule 5.5A. Select Provisions of Options trading either when there is buying or (B) There may be up to 10 expiration
Listing Procedures Plan selling interest, or 40 minutes prior to months, none further out than one-
daltland on DSKBBV9HB2PROD with NOTICES
(a) No change. the close, whichever occurs first. No hundred eighty (180) months.
quotations will be posted for such [(B) When a new Index LEAPS series
16 17 CFR 200.30–3(a)(12). option series until they are opened for is listed, such series will be opened for
1 15 U.S.C. 78s(b)(1). trading. trading either when there is buying or
2 17 CFR 240.19b–4. (c)] With regard to the listing of new selling interest, or 40 minutes prior to
3 15 U.S.C. 78s(b)(3)(A)(iii). January LEAPS series on equity option the close, whichever occurs first. No
4 17 CFR 240.19b–4(f)(6). classes, options on Exchange Traded quotations will be posted for such
VerDate Sep<11>2014 20:00 Aug 27, 2018 Jkt 244001 PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 E:\FR\FM\28AUN1.SGM 28AUN1](https://thefederalregister.org/doc/83_FR_44113/page/1.svg)
![Federal Register / Vol. 83, No. 167 / Tuesday, August 28, 2018 / Notices 43947
option series until they are opened for Addition of Long-Term Equity Options morning, depending on the range of
trading.] (‘‘LEAPS’’) prices in pre-market trading, which is
(2) No change. First, the OLPP has been amended to significant because events that occur
change the earliest date on which new after regular trading hours, such as
(c)–(e) No change. earnings releases, often have an
January LEAPS on equity options,
. . . Interpretations and Policies: options on Exchange Traded Funds important impact on the price of an
.01–.14 No change. (‘‘ETF’’), or options on Trust Issued underlying security. In addition, there
* * * * * Receipts (‘‘TIR’’) may be added to a are operational difficulties for market
single date (from three separate participants throughout the industry
The text of the proposed rule change adding series after system startup. To
months). As noted in the OLPP Notice,
is also available on the Exchange’s avoid the potential burden that would
in the past, there were operational
website (http://www.cboe.com/ result from the inability to add series as
concerns related to adding new January
AboutCBOE/CBOELegal a result of trading following regular
LEAPs series for all options classes on
RegulatoryHome.aspx), at the trading hours, the OLPP was amended
which LEAPs were listed on a single
Exchange’s Office of the Secretary, and to allow an additional category by
trading day.7 And, the addition of new
at the Commission’s Public Reference which the price of an underlying
series in a pre-electronic trading
Room. security may be measured. Specifically,
environment was a manual process. To
II. Self-Regulatory Organization’s accommodate this, the addition of new to conform to the amended OLPP, the
Statement of the Purpose of, and January LEAPs series was spread across Exchange proposes to add subparagraph
Statutory Basis for, the Proposed Rule three months (September, October, and (b)(i)(4) to Rule 5.5A to provide that ‘‘for
Change November). Today, however, these option series to be added based on
operational concerns related to January trading following regular trading
In its filing with the Commission, the LEAPs have been alleviated as new hours,’’ the price of the underlying
Exchange included statements series can be added in bulk security is measured by ‘‘the most
concerning the purpose of and basis for electronically. The Plan Participants, recent share price reported by all
the proposed rule change and discussed including the Exchange, believe that national securities exchanges between
any comments it received on the moving the addition of new January 3:15 p.m. and 5:00 p.m. (Chicago
proposed rule change. The text of these LEAPs series to no earlier than the time).’’ 10
statements may be examined at the Monday prior to the September
places specified in Item IV below. The Technical Changes
expiration would reduce marketplace
Exchange has prepared summaries, set confusion about available January The Exchange proposes to modify
forth in sections A, B, and C below, of LEAPs series. Where previously January Rules to delete now obsolete operational
the most significant aspects of such LEAPs series for options classes on the language, which dates back to when
statements. February or March expiration cycles LEAPs were first adopted. This language
would not have been available as early provides that when a new equity or
A. Self-Regulatory Organization’s
as January LEAPs series for options index LEAPS series, as applicable, is
Statement of the Purpose of, and
classes on the January expiration cycle, listed, such series will be opened for
Statutory Basis for, the Proposed Rule
under the proposed change, all January trading either when there is buying or
Change
LEAPs series will be available selling interest, or 40 minutes prior to
1. Purpose concurrently. Accordingly, to conform the close, whichever occurs first. No
to this change, the Exchange proposes to quotations will be posted for such
The purpose of this proposed rule modify current Rule 5.8(c) to reflect that option series until they are opened for
change is to amend Rules 5.5A, 5.8, and new January LEAPS series on equity trading. The Exchange proposes to
24.9 to conform to recently approved options classes, options on ETFs, or delete this language because when this
changes to the Options Listing options on TIRs, may not be added on language was adopted, LEAPs were not
Procedures Plan (‘‘OLPP’’).5 The a currently listed and traded option opened for trading until late in the
Exchange, which is one of the class earlier than the Monday prior to trading day unless there was buying or
Participant Exchanges 6 to the OLPP, the September expiration (which is 28 selling interest.11 Today, however,
currently has rules that are designed to months before the expiration).8 technological improvements allow the
incorporate the requirements of the Exchange to open all LEAP series at the
OLPP. All Participant Exchanges have Addition of Equity, ETF, and TIR
Option Series After Regular Trading same time as all other series in an
similar such (essentially uniform) rules option class.
to ensure consistency and compliance Hours
with the OLPP. The Exchange proposes Second, the OLPP has been amended 2. Statutory Basis
to modify such rules to reflect the recent to allow equity, ETF, and TIR option The Exchange believes the proposed
updates as described below. series to be added based on trading after rule change is consistent with the
regular trading hours (i.e., after-market).
5 See Securities Exchange Act Release Nos. 82235 As noted in the OLPP Notice, the prior 10 See proposed Rule 5.5A(b)(i)(4). The Exchange
(December 7, 2017), 82 FR 58668 (December 13, version of the OLPP did not allow for proposes to relocate ‘‘and’’ from subparagraph (2)
2017) (order approving the Fourth Amendment to option series to be added based on to (3) to conform to the change. See proposed Rule
the OLPP); 81893 (October 18, 2017), 82 FR 49249 5.5A(b)(i)(2) and (3).
(‘‘OLPP Notice’’). trading following regular trading hours.9 11 See current Rules 5.8(b) and 24.9(b)(1)(B). The
As such, the Exchange Participants were
daltland on DSKBBV9HB2PROD with NOTICES
6 In addition to the Exchange, the ‘‘Participant proposed rule change amends a cross-reference to
Exchanges’’ are: Box Options Exchange, LLC; Cboe are unable to add new option series that current Rule 5.8(c) (proposed Rule 5.8(b)), and
BZX Exchange, Inc.; Cboe C2 Exchange, Inc.; Cboe may result from trading following changes current Rule 5.8(d) to proposed Rule 5.8(c),
EDGX Exchange, Inc.; Miami International regular trading hours until the next to conform to the deletion of current Rule 5.8(b).
Securities Exchange, LLC; MIAX PEARL, LLC; See proposed Rule 5.8(b) and (c). The proposed rule
Nasdaq BX, Inc.; Nasdaq GEMX, LLC; Nasdaq ISE, change splits current Rule 24.9(b)(1)(A) into two
7 See OLPP Notice at 49249.
LLC; Nasdaq MRX, LLC; Nasdaq Options Market, provisions (proposed Rule 24.9(b)(1)(A) and (B)) to
8 See proposed Rule 5.8(b).
LLC; Nasdaq PHLX, LLC; NYSE American, LLC; separate two different rule provisions. See proposed
and NYSE Arca, Inc. 9 See OLPP Notice at 49250. Rule 24.9(b)(1).
VerDate Sep<11>2014 20:00 Aug 27, 2018 Jkt 244001 PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 E:\FR\FM\28AUN1.SGM 28AUN1](https://thefederalregister.org/doc/83_FR_44113/page/2.svg)
![Federal Register / Vol. 83, No. 167 / Tuesday, August 28, 2018 / Notices 43949
arguments concerning the foregoing, For the Commission, by the Division of SMALL BUSINESS ADMINISTRATION
including whether the proposed rule Trading and Markets, pursuant to delegated
change is consistent with the Act. authority.23 [Disaster Declaration #15664 and #15665;
Comments may be submitted by any of Eduardo A. Aleman, Wisconsin Disaster Number WI–00065]
the following methods: Assistant Secretary.
[FR Doc. 2018–18574 Filed 8–27–18; 8:45 am] Presidential Declaration of a Major
Electronic Comments BILLING CODE 8011–01–P
Disaster for Public Assistance Only for
the State of Wisconsin
• Use the Commission’s internet
comment form (http://www.sec.gov/ AGENCY: U.S. Small Business
SECURITIES AND EXCHANGE Administration.
rules/sro.shtml); or COMMISSION
• Send an email to rule-comments@ ACTION: Notice.
sec.gov. Please include File Number SR– Sunshine Act Meetings
SUMMARY: This is a Notice of the
CBOE–2018–061 on the subject line. Presidential declaration of a major
TIME AND DATE:2:30 p.m. on Thursday,
Paper Comments disaster for Public Assistance Only for
August 30, 2018.
the State of Wisconsin (FEMA–4383–
• Send paper comments in triplicate PLACE:Closed Commission Hearing DR), dated 08/10/2018.
to Secretary, Securities and Exchange Room 10800. Incident: Severe Storms, Straight-line
Commission, 100 F Street NE, STATUS: This meeting will be closed to Winds, and Flooding.
Washington, DC 20549–1090. the public. Incident Period: 06/15/2018 through
06/19/2018.
All submissions should refer to File MATTERS TO BE CONSIDERED: DATES: Issued on 08/10/2018.
Number SR–CBOE–2018–061. This file Commissioners, Counsel to the Physical Loan Application Deadline
number should be included on the Commissioners, the Secretary to the Date: 10/09/2018.
subject line if email is used. To help the Commission, and recording secretaries Economic Injury (EIDL) Loan
Commission process and review your will attend the closed meeting. Certain Application Deadline Date: 05/10/2019.
comments more efficiently, please use staff members who have an interest in
ADDRESSES: Submit completed loan
only one method. The Commission will the matters also may be present.
applications to: U.S. Small Business
post all comments on the Commission’s The General Counsel of the Administration, Processing and
internet website (http://www.sec.gov/ Commission, or his designee, has Disbursement Center, 14925 Kingsport
rules/sro.shtml). Copies of the certified that, in his opinion, one or Road, Fort Worth, TX 76155.
submission, all subsequent more of the exemptions set forth in 5
FOR FURTHER INFORMATION CONTACT: A.
amendments, all written statements U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B)
Escobar, Office of Disaster Assistance,
with respect to the proposed rule and (10) and 17 CFR 200.402(a)(3),
U.S. Small Business Administration,
change that are filed with the (a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and
409 3rd Street SW, Suite 6050,
Commission, and all written (a)(10), permit consideration of the
Washington, DC 20416, (202) 205–6734.
communications relating to the scheduled matters at the closed meeting.
SUPPLEMENTARY INFORMATION: Notice is
proposed rule change between the Commissioner Jackson, as duty hereby given that as a result of the
Commission and any person, other than officer, voted to consider the items President’s major disaster declaration on
those that may be withheld from the listed for the closed meeting in closed 08/10/2018, Private Non-Profit
public in accordance with the session. organizations that provide essential
provisions of 5 U.S.C. 552, will be The subject matters of the closed services of a governmental nature may
available for website viewing and meeting will be: file disaster loan applications at the
printing in the Commission’s Public Institution and settlement of address listed above or other locally
Reference Room, 100 F Street NE, injunctive actions; announced locations.
Washington, DC 20549, on official The following areas have been
business days between the hours of Institution and settlement of
administrative proceedings; and determined to be adversely affected by
10:00 a.m. and 3:00 p.m. Copies of the the disaster:
filing also will be available for Other matters relating to enforcement
proceedings. Primary Counties: Ashland, Bayfield,
inspection and copying at the principal Burnett, Clark, Douglas, Iron.
office of the Exchange. All comments At times, changes in Commission
The Interest Rates are:
received will be posted without change. priorities require alterations in the
Persons submitting comments are scheduling of meeting items. Percent
cautioned that we do not redact or edit CONTACT PERSON FOR MORE INFORMATION:
personal identifying information from For further information and to ascertain For Physical Damage:
comment submissions. You should what, if any, matters have been added, Non-Profit Organizations with
submit only information that you wish Credit Available Elsewhere ... 2.500
deleted or postponed; please contact Non-Profit Organizations with-
to make available publicly. All Brent J. Fields from the Office of the out Credit Available Else-
submissions should refer to File Secretary at (202) 551–5400. where ..................................... 2.500
Number SR–SR–CBOE–2018–061 and For Economic Injury:
daltland on DSKBBV9HB2PROD with NOTICES
Dated: August 23, 2018.
should be submitted on or before Brent J. Fields, Non-Profit Organizations
September 18, 2018. without Credit Available
Secretary. Elsewhere .......................... 2.500
[FR Doc. 2018–18679 Filed 8–24–18; 11:15 am]
BILLING CODE 8011–01–P The number assigned to this disaster
for physical damage is 156646 and for
23 17 CFR 200.30–3(a)(12). economic injury is 156650.
VerDate Sep<11>2014 20:00 Aug 27, 2018 Jkt 244001 PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 E:\FR\FM\28AUN1.SGM 28AUN1](https://thefederalregister.org/doc/83_FR_44113/page/4.svg)
Document Created: 2018-08-28 00:23:04
Document Modified: 2018-08-28 00:23:04
| 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 43946 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR