83_FR_44852 83 FR 44682 - Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend BOX Rules 5050 and 5070

83 FR 44682 - Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend BOX Rules 5050 and 5070

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 170 (August 31, 2018)

Page Range44682-44684
FR Document2018-18894

Federal Register, Volume 83 Issue 170 (Friday, August 31, 2018)
[Federal Register Volume 83, Number 170 (Friday, August 31, 2018)]
[Notices]
[Pages 44682-44684]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-18894]



[[Page 44682]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83960; File No. SR-BOX-2018-28]


Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Amend BOX 
Rules 5050 and 5070

August 27, 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 August 15, 2018, BOX Exchange LLC (the ``Exchange'') 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 self-regulatory organization. The Commission is 
publishing this notice to solicit comments on the proposed rule from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend BOX Rule Rules 5050 (Series of 
Options Contracts Open for Trading) and 5070 (Long-term Options 
Contracts) to conform to the recently approved changes to the Options 
Listing Procedures Plan (``OLPP'').\3\ The text of the proposed rule 
change is available from the principal office of the Exchange, at the 
Commission's Public Reference Room and also on the Exchange's internet 
website at http://boxoptions.com.
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    \3\ 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'').
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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 self-regulatory organization 
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 self-regulatory organization 
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 filing is to amend Rules 5050 (Series of 
Options Contracts Open for Trading) and 5070 (Long-term Options 
Contracts) to conform to the recently approved changes to the Options 
Listing Procedures Plan (``OLPP'').\4\
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    \4\ Id.
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    The Exchange, which is one of the Participant Exchanges to the 
OLPP, currently has rules that are designed to incorporate the 
requirements of the OLPP.\5\ 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.
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    \5\ In addition to the Exchange, the ``Participant Exchanges'' 
are: Chicago Board Options Exchange, Incorporated (now known as Cboe 
Exchange, Inc.), on behalf of the BATS Exchange, Inc. (now known as 
Cboe BZX Exchange, Inc.); C2 Exchange, Incorporated (now known as 
Cboe C2 Exchange, Inc.); EDGX Exchange, Inc. (now known as 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 
Arca, Inc.; and NYSE American, LLC.
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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. 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 Rule 5070(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).
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. As such, the Exchange Participants 
were 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 to Rule 5050(b)(1) 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 4:15 p.m. and 
6:00 p.m. Eastern Time.''
Technical Changes
    The Exchange proposes to modify Rule 5070(b) to delete now obsolete 
operational language, which dates back to when LEAPs were first 
adopted. The language in question provides that:


[[Page 44683]]


    After a new long-term options contract series is listed, such 
series will be opened for trading either when there is buying or 
selling interest, or forty (40) minutes prior to the close, 
whichever occurs first. No quotations will be posted for such 
options 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. Today, 
however, technological improvements allow the Exchange to open all LEAP 
series at the same time as all other series in an option class.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Securities Exchange Act of 1934 
(the ``Act''),\6\ in general, and Section 6(b)(5) of the Act,\7\ in 
particular, in that it is 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 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.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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    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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition 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 has 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 \8\ and Rule 19b-4(f)(6) thereunder.\9\ 
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.\10\
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    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 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.
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    A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\12\ 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.\13\ 
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.\14\
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    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
    \13\ See OLPP Notice, supra note 3.
    \14\ 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).
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    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

[[Page 44684]]

under Section 19(b)(2)(B) \15\ of the Act to determine whether the 
proposed rule change should be approved or disapproved.
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    \15\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-BOX-2018-28 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-BOX-2018-28. 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 a.m. and 3 
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-BOX-2018-28 and should be submitted on 
or before September 21, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-18894 Filed 8-30-18; 8:45 am]
 BILLING CODE 8011-01-P



                                               44682                         Federal Register / Vol. 83, No. 170 / Friday, August 31, 2018 / Notices

                                               SECURITIES AND EXCHANGE                                 A. Self-Regulatory Organization’s                     LEAPs series for options classes on the
                                               COMMISSION                                              Statement of the Purpose of, and                      February or March expiration cycles
                                                                                                       Statutory Basis for, the Proposed Rule                would not have been available as early
                                               [Release No. 34–83960; File No. SR–BOX–                 Change                                                as January LEAPs series for options
                                               2018–28]                                                                                                      classes on the January expiration cycle,
                                                                                                       1. Purpose
                                                                                                                                                             under the proposed change, all January
                                               Self-Regulatory Organizations; BOX                         The purpose of this filing is to amend             LEAPs series will be available
                                               Exchange LLC; Notice of Filing and                      Rules 5050 (Series of Options Contracts               concurrently.
                                               Immediate Effectiveness of a Proposed                   Open for Trading) and 5070 (Long-term                    Accordingly, to conform to this
                                               Rule Change To Amend BOX Rules                          Options Contracts) to conform to the                  change, the Exchange proposes to
                                               5050 and 5070                                           recently approved changes to the                      modify Rule 5070(c) to reflect that new
                                                                                                       Options Listing Procedures Plan                       January LEAPS series on equity options
                                               August 27, 2018.                                        (‘‘OLPP’’).4                                          classes, options on ETFs, or options on
                                                  Pursuant to Section 19(b)(1) of the                     The Exchange, which is one of the                  TIRs, may not be added on a currently
                                               Securities Exchange Act of 1934                         Participant Exchanges to the OLPP,                    listed and traded option class earlier
                                               (‘‘Act’’),1 and Rule 19b–4 thereunder,2                 currently has rules that are designed to              than the Monday prior to the September
                                               notice is hereby given that on August                   incorporate the requirements of the                   expiration (which is 28 months before
                                               15, 2018, BOX Exchange LLC (the                         OLPP.5 All Participant Exchanges have                 the expiration).
                                               ‘‘Exchange’’) filed with the Securities                 similar such (essentially uniform) rules
                                               and Exchange Commission                                 to ensure consistency and compliance                  Addition of Equity, ETF, and TIR
                                               (‘‘Commission’’) the proposed rule                      with the OLPP. The Exchange proposes                  Option Series After Regular Trading
                                               change as described in Items I and II                   to modify such rules to reflect the recent            Hours
                                               below, which Items have been prepared                   updates as described below.                              Second, the OLPP has been amended
                                               by the self-regulatory organization. The                                                                      to allow equity, ETF, and TIR option
                                                                                                       Addition of Long-Term Equity Options
                                               Commission is publishing this notice to                                                                       series to be added based on trading after
                                                                                                       (‘‘LEAPS’’)
                                               solicit comments on the proposed rule                                                                         regular trading hours (i.e., after-market).
                                               from interested persons.                                   First, the OLPP has been amended to                As noted in the OLPP Notice, the prior
                                                                                                       change the earliest date on which new                 version of the OLPP did not allow for
                                               I. Self-Regulatory Organization’s                       January LEAPS on equity options,
                                               Statement of the Terms of Substance of                                                                        option series to be added based on
                                                                                                       options on Exchange Traded Funds                      trading following regular trading hours.
                                               the Proposed Rule Change                                (‘‘ETF’’), or options on Trust Issued                 As such, the Exchange Participants were
                                                  The Exchange proposes to amend                       Receipts (‘‘TIR’’) may be added to a                  unable to add new option series that
                                               BOX Rule Rules 5050 (Series of Options                  single date (from three separate                      may result from trading following
                                               Contracts Open for Trading) and 5070                    months). As noted in the OLPP Notice,                 regular trading hours until the next
                                               (Long-term Options Contracts) to                        in the past there were operational                    morning, depending on the range of
                                               conform to the recently approved                        concerns related to adding new January                prices in pre-market trading, which is
                                               changes to the Options Listing                          LEAPs series for all options classes on               significant because events that occur
                                               Procedures Plan (‘‘OLPP’’).3 The text of                which LEAPs were listed on a single                   after regular trading hours, such as
                                               the proposed rule change is available                   trading day. And, the addition of new                 earnings releases, often have an
                                               from the principal office of the                        series in a pre-electronic trading                    important impact on the price of an
                                               Exchange, at the Commission’s Public                    environment was a manual process. To                  underlying security. In addition, there
                                               Reference Room and also on the                          accommodate this, the addition of new                 are operational difficulties for market
                                               Exchange’s internet website at http://                  January LEAPs series was spread across                participants throughout the industry
                                               boxoptions.com.                                         three months (September, October, and                 adding series after system startup. To
                                                                                                       November). Today, however, these                      avoid the potential burden that would
                                               II. Self-Regulatory Organization’s                      operational concerns related to January
                                               Statement of the Purpose of, and                                                                              result from the inability to add series as
                                                                                                       LEAPs have been alleviated as new                     a result of trading following regular
                                               Statutory Basis for, the Proposed Rule                  series can be added in bulk
                                               Change                                                                                                        trading hours, the OLPP was amended
                                                                                                       electronically. The Plan Participants,                to allow an additional category by
                                                 In its filing with the Commission, the                including the Exchange, believe that                  which the price of an underlying
                                               self-regulatory organization included                   moving the addition of new January                    security may be measured. Specifically,
                                               statements concerning the purpose of,                   LEAPs series to no earlier than the                   to conform to the amended OLPP, the
                                               and basis for, the proposed rule change                 Monday prior to the September                         Exchange proposes to add to Rule
                                               and discussed any comments it received                  expiration would reduce marketplace                   5050(b)(1) to provide that ‘‘for option
                                               on the proposed rule change. The text                   confusion about available January                     series to be added based on trading
                                               of these statements may be examined at                  LEAPs series. Where previously January                following regular trading hours,’’ the
                                               the places specified in Item IV below.                    4 Id.
                                                                                                                                                             price of the underlying security is
                                               The self-regulatory organization has                      5 In addition to the Exchange, the ‘‘Participant
                                                                                                                                                             measured by ‘‘the most recent share
                                               prepared summaries, set forth in                        Exchanges’’ are: Chicago Board Options Exchange,      price reported by all national securities
                                               Sections A, B, and C below, of the most                 Incorporated (now known as Cboe Exchange, Inc.),      exchanges between 4:15 p.m. and 6:00
                                               significant aspects of such statements.                 on behalf of the BATS Exchange, Inc. (now known       p.m. Eastern Time.’’
daltland on DSKBBV9HB2PROD with NOTICES




                                                                                                       as Cboe BZX Exchange, Inc.); C2 Exchange,
                                                 1 15
                                                                                                       Incorporated (now known as Cboe C2 Exchange,          Technical Changes
                                                       U.S.C. 78s(b)(1).                               Inc.); EDGX Exchange, Inc. (now known as Cboe
                                                  2 17 CFR 240.19b–4.
                                                                                                       EDGX Exchange, Inc.); Miami International               The Exchange proposes to modify
                                                  3 See Securities Exchange Act Release Nos. 82235     Securities Exchange, LLC; MIAX PEARL, LLC;            Rule 5070(b) to delete now obsolete
                                               (December 7, 2017), 82 FR 58668 (December 13,           Nasdaq BX, Inc.; Nasdaq GEMX, LLC; Nasdaq ISE,
                                               2017) (order approving the Fourth Amendment to          LLC; Nasdaq MRX, LLC; Nasdaq Options Market,
                                                                                                                                                             operational language, which dates back
                                               the OLPP); 81893 (October 18, 2017), 82 FR 49249        LLC; Nasdaq PHLX, LLC; NYSE Arca, Inc.; and           to when LEAPs were first adopted. The
                                               (‘‘OLPP Notice’’).                                      NYSE American, LLC.                                   language in question provides that:


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                                                                                Federal Register / Vol. 83, No. 170 / Friday, August 31, 2018 / Notices                                                          44683

                                                  After a new long-term options contract                  and coordination with persons engaged                    19b–4(f)(6) thereunder.9 Because the
                                               series is listed, such series will be opened for           in facilitating transactions in securities,              proposed rule change does not: (i)
                                               trading either when there is buying or selling             and to remove impediments to and                         Significantly affect the protection of
                                               interest, or forty (40) minutes prior to the               perfect the mechanisms of a free and                     investors or the public interest; (ii)
                                               close, whichever occurs first. No quotations
                                               will be posted for such options series until
                                                                                                          open market and a national market                        impose any significant burden on
                                               they are opened for trading.                               system, by allowing the Exchange to                      competition; and (iii) become operative
                                                                                                          make series available for trading with                   prior to 30 days from the date on which
                                                  The Exchange proposes to delete this                    reduced operational difficulties. The                    it was filed, or such shorter time as the
                                               language because when this language                        Exchange notes that this proposed                        Commission may designate, if
                                               was adopted LEAPs were not opened for                      change, which is consistent with the                     consistent with the protection of
                                               trading until late in the trading day                      amended OLPP should provide market                       investors and the public interest, the
                                               unless there was buying or selling                         participants with earlier notice                         proposed rule change has become
                                               interest. Today, however, technological                    regarding what options series will be                    effective pursuant to Section 19(b)(3)(A)
                                               improvements allow the Exchange to                         available for trading the following day,                 of the Act and Rule 19b–4(f)(6)(iii)
                                               open all LEAP series at the same time                      and should help to enhance investors’                    thereunder.10
                                               as all other series in an option class.                    ability to plan their options trading.                      A proposed rule change filed under
                                               2. Statutory Basis                                            The Exchange also believes that the                   Rule 19b–4(f)(6) 11 normally does not
                                                                                                          proposed technical changes, including                    become operative prior to 30 days after
                                                  The Exchange believes that the                          deleting obsolete language and                           the date of the filing. However, pursuant
                                               proposal is consistent with the                            reorganizing and consolidating the rule,                 to Rule 19b–4(f)(6)(iii),12 the
                                               requirements of Section 6(b) of the                        promote just and equitable principles of                 Commission may designate a shorter
                                               Securities Exchange Act of 1934 (the                       trade, foster cooperation and                            time if such action is consistent with the
                                               ‘‘Act’’),6 in general, and Section 6(b)(5)                 coordination with persons engaged in                     protection of investors and the public
                                               of the Act,7 in particular, in that it is                  facilitating transactions in securities,                 interest. The Exchange has asked the
                                               designed to prevent fraudulent and                         and remove impediments to and perfect                    Commission to waive the 30-day
                                               manipulative acts and practices, to                        the mechanism of a free and open                         operative delay so that the proposal may
                                               promote just and equitable principles of                   market and a national market system.                     become operative immediately upon
                                               trade, to foster cooperation and
                                                                                                          B. Self-Regulatory Organization’s                        filing. The Commission notes that the
                                               coordination with persons engaged in
                                                                                                          Statement on Burden on Competition                       Exchange’s proposal would conform the
                                               facilitating transactions in securities, to
                                                                                                                                                                   Exchange’s rules to the amended OLPP,
                                               remove impediments to and perfect the                        The Exchange does not believe that                     which the Commission previously
                                               mechanism of a free and open market                        the proposed rule change will impose                     approved.13 Accordingly, the
                                               and a national market system, and, in                      any burden on competition not                            Commission believes that the proposal
                                               general to protect investors and the                       necessary or appropriate in furtherance                  raises no new or novel regulatory issues
                                               public interest.                                           of the purposes of the Act. Specifically,
                                                  In particular, the proposed rule                                                                                 and waiver of the 30-day operative
                                                                                                          the Exchange believes that by                            delay is consistent with the protection
                                               change, which conforms to the recently                     conforming Exchange rules to the
                                               adopted provisions of the OLPP, as                                                                                  of investors and the public interest. The
                                                                                                          amended OLPP, the Exchange would                         Commission therefore waives the 30-day
                                               amended, allows the Exchange to                            promote regulatory clarity and
                                               continue to list extended far term option                                                                           operative delay and designates the
                                                                                                          consistency, thereby reducing burdens                    proposed rule change to be operative
                                               series that have been viewed as                            on the marketplace and facilitating
                                               beneficial to traders, investors and                                                                                upon filing.14
                                                                                                          investor protection. The Exchange                           At any time within 60 days of the
                                               public customers. Accordingly, the                         believes that adopting rules, which it
                                               Exchange believes that the proposal is                                                                              filing of such proposed rule change, the
                                                                                                          anticipates will likewise be adopted by                  Commission summarily may
                                               consistent with the Act because it will                    Participant Exchanges, would allow for
                                               allow the Exchange to list all January,                                                                             temporarily suspend such rule change if
                                                                                                          continued competition between                            it appears to the Commission that such
                                               2021 expiration series on the Monday                       Exchange market participants trading
                                               prior to the September, 2018 expiration.                                                                            action is necessary or appropriate in the
                                                                                                          similar products as their counterparts                   public interest, for the protection of
                                               Moreover, this change would simplify                       on other exchanges, while at the same
                                               the process for adding new January                                                                                  investors, or otherwise in furtherance of
                                                                                                          time allowing the Exchange to continue                   the purposes of the Act. If the
                                               LEAP options series and reduce                             to compete for order flow with other
                                               potential for investor confusion because                                                                            Commission takes such action, the
                                                                                                          exchanges in option issues.                              Commission shall institute proceedings
                                               all new January LEAP options would be
                                               made available beginning at the same                       C. Self-Regulatory Organization’s
                                               time, consistent with the amended                          Statement on Comments on the                               9 17  CFR 240.19b–4(f)(6).
                                               OLPP. The Exchange notes that this                         Proposed Rule Change Received From                         10 17  CFR 240.19b–4(f)(6). In addition, Rule 19b–
                                                                                                          Members, Participants, or Others                         4(f)(6)(iii) requires a self-regulatory organization to
                                               proposal does not propose any new                                                                                   give the Commission written notice of its intent to
                                               provisions that have not already been                        The Exchange has neither solicited                     file the proposed rule change, along with a brief
                                               approved by the Commission in the                          nor received comments on the proposed                    description and text of the proposed rule change,
                                                                                                                                                                   at least five business days prior to the date of filing
                                               amended OLPP, but instead maintains                        rule change.                                             of the proposed rule change, or such shorter time
                                               series listing rules that conform to the                                                                            as designated by the Commission. The Exchange
                                                                                                          III. Date of Effectiveness of the
                                               amended OLPP.                                                                                                       has satisfied this requirement.
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                                                  The proposal to permit series to be                     Proposed Rule Change and Timing for                         11 17 CFR 240.19b–4(f)(6).

                                               added based on after-market trading is                     Commission Action                                           12 17 CFR 240.19b–4(f)(6)(iii).

                                               designed to promote just and equitable                        The Exchange has filed the proposed                      13 See OLPP Notice, supra note 3.
                                                                                                                                                                      14 For purposes only of waiving the 30-day
                                               principles of trade, to foster cooperation                 rule change pursuant to Section
                                                                                                                                                                   operative delay, the Commission has also
                                                                                                          19(b)(3)(A)(iii) of the Act 8 and Rule                   considered the proposed rule’s impact on
                                                 6 15   U.S.C. 78f(b).                                                                                             efficiency, competition, and capital formation. See
                                                 7 15   U.S.C. 78f(b)(5).                                   8 15   U.S.C. 78s(b)(3)(A)(iii).                       15 U.S.C. 78c(f).



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                                               44684                            Federal Register / Vol. 83, No. 170 / Friday, August 31, 2018 / Notices

                                               under Section 19(b)(2)(B) 15 of the Act to                   For the Commission, by the Division of              A. Self-Regulatory Organization’s
                                               determine whether the proposed rule                        Trading and Markets, pursuant to delegated            Statement of the Purpose of, and
                                               change should be approved or                               authority.16                                          Statutory Basis for, the Proposed Rule
                                               disapproved.                                               Eduardo A. Aleman,                                    Change
                                                                                                          Assistant Secretary.
                                               IV. Solicitation of Comments                                                                                     1. Purpose
                                                                                                          [FR Doc. 2018–18894 Filed 8–30–18; 8:45 am]
                                                 Interested persons are invited to                        BILLING CODE 8011–01–P
                                                                                                                                                                   The purpose of this proposed rule
                                               submit written data, views, and                                                                                  change is to amend Rules 19.8 and 29.11
                                               arguments concerning the foregoing,                                                                              to delete now obsolete operational
                                               including whether the proposed rule                        SECURITIES AND EXCHANGE                               language, which dates back to when
                                               change is consistent with the Act.                         COMMISSION                                            long-term options contracts were first
                                               Comments may be submitted by any of                                                                              adopted. This language provides that
                                               the following methods:                                     [Release No. 34–83958; File No. SR–                   when a new equity or index long-term
                                                                                                          CboeEDGX–2018–039]
                                                                                                                                                                options contract series, as applicable, is
                                               Electronic Comments
                                                                                                          Self-Regulatory Organizations; Cboe                   listed, such series will be opened for
                                                 • Use the Commission’s internet                                                                                trading either when there is buying or
                                               comment form (http://www.sec.gov/                          EDGX Exchange, Inc.; Notice of Filing
                                                                                                          and Immediate Effectiveness of a                      selling interest, or 40 minutes prior to
                                               rules/sro.shtml); or                                                                                             the close, whichever occurs first. No
                                                 • Send an email to rule-comments@                        Proposed Rule Change To Delete
                                                                                                          Obsolete Language Regarding the                       quotations will be posted for such
                                               sec.gov. Please include File Number SR–                                                                          option series until they are opened for
                                               BOX–2018–28 on the subject line.                           Timing of Listing Long-Term Options
                                                                                                          Series                                                trading. The Exchange proposes to
                                               Paper Comments                                                                                                   delete this language because when this
                                                                                                          August 27, 2018.                                      language was adopted, long-term
                                                 • Send paper comments in triplicate                                                                            options contracts were not opened for
                                               to Secretary, Securities and Exchange                         Pursuant to Section 19(b)(1) of the
                                                                                                          Securities Exchange Act of 1934 (the                  trading until late in the trading day
                                               Commission, 100 F Street NE,                                                                                     unless there was buying or selling
                                               Washington, DC 20549–1090.                                 ‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                                                                          notice is hereby given that on August                 interest. Today, however, technological
                                               All submissions should refer to File                                                                             improvements 3 allow the Exchange to
                                                                                                          24, 2018, Cboe EDGX Exchange, Inc.
                                               Number SR–BOX–2018–28. This file                                                                                 open all long-term options contract
                                                                                                          (the ‘‘Exchange’’ or ‘‘EDGX’’) filed with
                                               number should be included on the                                                                                 series at the same time as all other series
                                                                                                          the Securities and Exchange
                                               subject line if email is used. To help the                                                                       in an option class.4
                                                                                                          Commission (‘‘Commission’’) the
                                               Commission process and review your
                                                                                                          proposed rule change as described in                  2. Statutory Basis
                                               comments more efficiently, please use
                                                                                                          Items I and II below, which Items have
                                               only one method. The Commission will                                                                                The Exchange believes the proposed
                                                                                                          been prepared by the Exchange. The
                                               post all comments on the Commission’s                                                                            rule change is consistent with the
                                                                                                          Commission is publishing this notice to
                                               internet website (http://www.sec.gov/                                                                            Securities Exchange Act of 1934 (the
                                                                                                          solicit comments on the proposed rule
                                               rules/sro.shtml). Copies of the                                                                                  ‘‘Act’’) and the rules and regulations
                                                                                                          change from interested persons.
                                               submission, all subsequent                                                                                       thereunder applicable to the Exchange
                                               amendments, all written statements                         I. Self-Regulatory Organization’s                     and, in particular, the requirements of
                                               with respect to the proposed rule                          Statement of the Terms of Substance of                Section 6(b) of the Act.5 Specifically,
                                               change that are filed with the                             the Proposed Rule Change                              the Exchange believes the proposed rule
                                               Commission, and all written                                   The Exchange is proposing to amend                 change is consistent with the Section
                                               communications relating to the                             Rules 19.8 and 29.11.                                 6(b)(5) 6 requirements that the rules of
                                               proposed rule change between the                              The text of the proposed rule change               an exchange be designed to prevent
                                               Commission and any person, other than                      is available at the Exchange’s website at             fraudulent and manipulative acts and
                                               those that may be withheld from the                        www.markets.cboe.com, at the principal                practices, to promote just and equitable
                                               public in accordance with the                              office of the Exchange, and at the                    principles of trade, to foster cooperation
                                               provisions of 5 U.S.C. 552, will be                        Commission’s Public Reference Room.                   and coordination with persons engaged
                                               available for website viewing and                                                                                in regulating, clearing, settling,
                                               printing in the Commission’s Public                        II. Self-Regulatory Organization’s                    processing information with respect to,
                                               Reference Room, 100 F Street NE,                           Statement of the Purpose of, and                      and facilitating transactions in
                                               Washington, DC 20549, on official                          Statutory Basis for, the Proposed Rule                securities, to remove impediments to
                                               business days between the hours of 10                      Change                                                and perfect the mechanism of a free and
                                               a.m. and 3 p.m. Copies of the filing also                    In its filing with the Commission, the              open market and a national market
                                               will be available for inspection and                       Exchange included statements                          system, and, in general, to protect
                                               copying at the principal office of the                     concerning the purpose of and basis for               investors and the public interest.
                                               Exchange. All comments received will                       the proposed rule change and discussed                Additionally, the Exchange believes the
                                               be posted without change. Persons                          any comments it received on the                       proposed rule change is consistent with
                                               submitting comments are cautioned that                     proposed rule change. The text of these
                                                                                                                                                                  3 Historically, market participants needed to
                                               we do not redact or edit personal                          statements may be examined at the                     manually adjust pricing models when a new long-
                                               identifying information from comment                       places specified in Item IV below. The                term options contract series was added, which was
                                               submissions. You should submit only                        Exchange has prepared summaries, set                  time-consuming and created pricing risk. Market
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                                               information that you wish to make                          forth in Sections A, B, and C below, of               participants’ systems are able to incorporate series
                                               available publicly. All submissions                                                                              added intraday in an automatic, and thus more
                                                                                                          the most significant parts of such                    timely, manner. Therefore, any previous operational
                                               should refer to File Number SR–BOX–                        statements.                                           concerns related to the historic manual process
                                               2018–28 and should be submitted on or                                                                            have been alleviated.
                                               before September 21, 2018.                                   16 17 CFR 200.30–3(a)(12).                            4 See Rule 19.6(a)–(c) and 29.11(c).
                                                                                                            1 15 U.S.C. 78s(b)(1).                                5 15 U.S.C. 78f(b).
                                                 15 15   U.S.C. 78s(b)(2)(B).                               2 17 CFR 240.19b–4.                                   6 15 U.S.C. 78f(b)(5).




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Document Created: 2018-08-31 00:53:52
Document Modified: 2018-08-31 00:53:52
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation83 FR 44682 

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