83 FR 60921 - Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Amend Its Rules Regarding How the System Handles Market Orders in Series With No Bid or No Offer
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 228 (November 27, 2018)
Federal Register Volume 83, Issue 228 (November 27, 2018)
| Page Range | 60921-60924 | |
| FR Document | 2018-25733 |
[Federal Register Volume 83, Number 228 (Tuesday, November 27, 2018)] [Notices] [Pages 60921-60924] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-25733] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-84631; File No. SR-CboeBZX-2018-082] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Amend Its Rules Regarding How the System Handles Market Orders in Series With No Bid or No Offer November 20, 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 November 16, 2018, Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') 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 Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX Options'') proposes to amend its Rules regarding how the System handles Market Orders in series with no bid or no offer. (additions are italicized; deletions are [bracketed]) * * * * * Rules of Cboe BZX Exchange, Inc. * * * * * Rule 21.17. Additional Price Protection Mechanisms and Risk Controls The System's acceptance and execution of orders and quotes are subject to the price protection mechanisms and risk controls in Rule 21.16, this Rule 21.17 and as otherwise set forth in the Rules. All numeric values established by the Exchange pursuant to this Rule will be maintained by the Exchange in publicly available specifications and/or published in a Regulatory Circular. Unless otherwise specified the price protections set forth in this Rule, including the numeric values established by the Exchange, may not be disabled or adjusted. The Exchange may share any of a User's risk settings with the Clearing Member that clears transactions on behalf of the User. (a)-(d) No change. (e) Market Orders in No-Bid (Offer) Series. (1) If the System receives a sell Market Order in a series after it is open for trading with an NBB of zero: (A) if the NBO in the series is less than or equal to $0.50, then the System converts the Market Order to a Limit Order with a limit price equal to the minimum trading increment applicable to the series and enters the order into the BZX Options Book with a timestamp based on the time it enters the Book. If the order has a Time-in-Force of GTC or GTD that expires on a subsequent day, the order remains on the Book as a Limit Order until it executes, expires, or the User cancels it. (B) if the NBO in the series is greater than $0.50, then the System cancels or rejects the market order. (2) If the System receives a buy market order in a series after it is open for trading with an NBO of zero, the System cancels or rejects the market order. * * * * * 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. [[Page 60922]] 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 In 2016, the Exchange's parent company, Cboe Global Markets, Inc. (formerly named CBOE Holdings, Inc.) (``Cboe Global''), which is the parent company of Cboe Exchange, Inc. (``Cboe Options'') and Cboe C2 Exchange, Inc., acquired the Exchange, Cboe EDGA Exchange, Inc. (``EDGA''), Cboe EDGX Exchange, Inc. (``EDGX or EDGX Options''), and Cboe BYX Exchange, Inc. (``BYX'' and, together with C2, Cboe Options, EDGX, EDGA, and BZX, the ``Cboe Affiliated Exchanges''). The Cboe Affiliated Exchanges are working to align certain system functionality, retaining only intended differences between the Cboe Affiliated Exchanges, in the context of a technology migration. Thus, the proposals set forth below are intended to add certain functionality to the Exchange's System that is more similar to functionality offered by Cboe Options in order to ultimately provide a consistent technology offering for market participants who interact with the Cboe Affiliated Exchanges. Although the Exchange intentionally offers certain features that differ from those offered by its affiliates and will continue to do so, the Exchange believes that offering similar functionality to the extent practicable will reduce potential confusion for Users. The Exchange proposes to amend its Rules regarding how the System handles a market order when there is no bid or offer, as applicable, against which the order may execute. A market order is an order to buy or sell at the best price available at the time of execution.\5\ Currently, based on this definition, if the System receives a sell market order when there are no bids against which the order may execute, the System cancels the order. Similarly, if the System receives a buy market order when there are no offers against which the order may execute, the System cancels the order. The proposed rule change first codifies this handling of a buy market order when there national best offer (``NBO'') is zero, which is consistent with current functionality.\6\ As noted above, this handling is consistent with the definition of a market order.\7\ It provides protection for these orders to prevent execution at potentially erroneous prices when a buy order is submitted in a series with no offer. --------------------------------------------------------------------------- \5\ See Rule 21.1(d)(5). \6\ See proposed Rule 21.17(e)(2). \7\ The proposed rule change is also consistent with Cboe Options functionality and C2 Rule 6.14(a)(1). --------------------------------------------------------------------------- The Exchange also proposes to amend how the System handles sell Market Orders submitted in a series with no bid. Currently, if the System receives a Market Order to sell in a no-bid series, the System cancels or rejects the order. Pursuant to the proposed rule change, if the System receives a Market Order to sell in an option series with an NBB of zero: (1) If the NBO in the series is less than or equal to $0.50, then the System converts the Market Order to a limit order with a limit price equal to the minimum trading increment applicable to the series and enters the order into the BZX Options Book with a timestamp based on the time it enters the Book. If the order has a Time-in-Force of GTC or GTD that expires on a subsequent day, the order remains on the Book as a Limit Order until it executes, expires, or the User cancels it. (2) if the NBO in the series is greater than $0.50, then the System cancels the Market Order.\8\ --------------------------------------------------------------------------- \8\ See proposed Rule 21.17(e)(1). --------------------------------------------------------------------------- The proposed handling of sell Market Orders in no-bid series when the NBO in the series is greater than $0.50 is consistent with current functionality. The proposed rule change serves as a protection feature for investors in certain situations, such as when a series is no-bid because the last bid traded just prior to entry of the sell Market Order. The purpose of this threshold is to limit the automatic booking of Market Orders to sell at minimum increments to only those for true zero-bid options, as options in no-bid series with an offer of greater than $0.50 are less likely to be worthless. For example, if the System receives a sell Market Order in a no-bid series with a minimum increment of $0.01 and the NBO is $0.01, the System will convert the order to a Limit Order with a price of $0.01 and enter it on the BZX Options Book. Because the order will have a timestamp based on that time of Book entry, it will have priority behind any other Limit Orders to sell at $0.01 that were already resting on the Book. At that point, even if the series is no-bid because, for example, the last bid just traded and the limit order trades at $0.01, the next bid entered after the trade would not be higher than $0.01. If the order has a Time-in-Force of GTC or GTD that expires on a subsequent day, the order remains on the Book until it executes, expires, or the User cancels.\9\ --------------------------------------------------------------------------- \9\ This functionality is consistent with the purpose of a GTC or GTD that expires on a subsequent trading day, which is to remain on the Book and available for execution until the User cancels it or until the time specified by the User. The Exchange notes that market orders with any other Time-in-Force would no longer be on the Book if they did not execute during the trading day. --------------------------------------------------------------------------- However, if the System receives a sell Market Order in a no-bid series with a minimum increment of $0.01 and the NBO is $1.20 (because, for example, the last bid of $1.00 just traded and a new bid has not yet populated the disseminated quote), the System will cancel or reject the order. Cancellation prevents an anomalous execution price, since the next bid entered in that series is likely to be much higher than $0.01. It would be unfair to the User to let is Market Order trade as a limit order for $0.01 because, for example, the firm submitted the order during the brief time when there were no disseminated bids in a series trading significantly higher than the minimum increment. The Exchange believes the threshold of $0.50 is reasonable. The Exchange notes that this threshold the same as the threshold in the Cboe Options rule,\10\ and is less than the current width for the Market Order NBBO width protection, pursuant to which the System will reject or cancel back to the User a Market Order submitted to the System when the NBBO width is greater than 100% of the midpoint of the NBBO, subject to a $5 minimum and $10 maximum.\11\ Notwithstanding this provision, the proposed rule change would allow for the potential execution of sell Market Orders in no-bid series [[Page 60923]] with offers less than or equal to $0.50. If the threshold in the proposed rule change was higher, there would be increased risk of having a Market Order trade a minimum increment in a series that is not truly no-bid. The proposed rule change is substantially the same as Cboe Options Rule 6.13(b)(vi). --------------------------------------------------------------------------- \10\ See Cboe Options Rule 6.13(b)(vi). \11\ See Rule 21.17(a); see also Exchange Notice, BZX and EDGX Options Exchanges Feature Pack 2--Update (December 14, 2017), available at http://markets.cboe.com/resources/release_notes/2017/Update-2-Cboe-BZX-and-EDGX-Options-Exchanges-Feature-Pack-2.pdf, for current settings. Pursuant to this protection, if the NBBO for a series was $0.00--$0.50, the width of the NBBO (0.50) is greater than 100% of the midpoint (0.25); however, pursuant to the minimum, a market order would be accepted pursuant to this protection because the width is less than the 5.00 minimum. The proposed rule change provides additional price protection for market orders in no-bid series. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the ``Act'') and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.\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 Exchange believes the proposed rule change regarding the handling of sell Market Orders in no-bid series assists with the maintenance of fair and orderly markets and protects investors and the public interest, because it provides for automated handling of orders in series that are likely truly no-bid, ultimately resulting in more efficient executions of these orders. Additionally, the proposed rule change prevents executions of sell Market Orders in no-bid series with higher offers at potentially extreme prices in series that are not truly no-bid. The Exchange believes this threshold appropriately reflects the interests of investors, as options in no-bid series with offers higher than $0.50 are less likely to be worthless than no-bid series with offers no higher than $0.50, and cancelling the orders will prevent execution of these orders at unfavorable prices. The Exchange also believes the $0.50 threshold promotes fair and orderly markets, because sell Market Orders in no-bid series with offers of $0.50 or less are likely to be individuals seeking to close out a worthless position, for which the proposed automatic handling is appropriate. The proposed change is also substantially the same as Cboe Options Rule 6.13(b)(vi). The proposed handling of buy Market Orders in no-offer series benefits investors, because it codifies current order handling and thus provides investors with more transparency in the Rules with respect to how the System will handle these orders. The proposed change is also substantially the same as C2 Rule 6.14(a)(1). When Cboe Options migrates to the same technology as that of the Exchange and other Cboe Affiliated Exchanges, Users of the Exchange and other Cboe Affiliated Exchanges will have access to similar functionality on all Cboe Affiliated Exchanges and similar language can be incorporated into the rules of all Cboe Affiliated Exchanges. As such, the proposed rule change would foster cooperation and coordination with persons engaged in facilitating transactions in securities and would 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 that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe the proposed rule changes will impose any burden on intramarket competition, because it will apply in the same manner to all buy or sell Market Orders submitted in no-offer or no-bid series, respectively. Additionally, the proposed rule change has no impact on sell Market Orders submitted in no-bid series with an offer of more than $0.50 or on buy Market Orders submitted in no-offer series, which orders will continue to be handled in the same manner as they are today (i.e. they will be cancelled or rejected). The Exchange does not believe the proposed rule change will impose any burden on intermarket competition, as it will provide sell Market Orders in true no-bid series with additional execution opportunities (either on the Exchange or at away markets pursuant to linkage rules) while providing an additional protection measure for sell Market Orders in no-bid series that may not be truly no-bid. As noted above, the proposed rule change has no impact on the handling of all other sell Market Orders in no-bid series or on buy Market Orders in no-offer series. The Exchange believes this price protection will allow Members to sell Market Orders with reduced fear of inadvertent exposure to excessive risk, which will benefit investors through increased liquidity for the execution of their orders. The proposed rule change related to the handling of buy Market Orders is consistent with current Exchange functionality and will have no impact on how those orders will handled, and it is substantially the same as C2 Rule 6.14(a)(1). The proposed rule change related to the handling of sell Market Orders is substantially the same as Cboe Options Rule 6.13(b)(vi).\15\ --------------------------------------------------------------------------- \15\ The Exchange notes other options exchanges have similar rules that convert sell market orders in no-bid series to limit orders with a price of a minimum increment if the offer in the series is below a certain threshold (the thresholds differ in those rules). See, e.g., Miami International Securities Exchange, LLC (``MIAX'') Rule 519(a)(1); and NASDAQ ISE, LLC (``ISE'') Rule 713(b). --------------------------------------------------------------------------- C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act \16\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\17\ --------------------------------------------------------------------------- \16\ 15 U.S.C. 78s(b)(3)(A)(iii). \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, Rule 19b-4(f)(6)(iii) \19\ permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the [[Page 60924]] Commission to waive the 30-day operative delay so that the proposed rule change may become effective and operative on November 29, 2018. The Exchange states that waiver of the operative delay will provide Users with additional flexibility to manage and display their orders and provide additional control over their executions on the Exchange as soon as possible. The Exchange further states that waiver of the operative delay will allow the Exchange to continue to strive towards a complete technology integration of the Cboe Affiliated Exchanges, with gradual roll-outs of new functionality to ensure the stability of the System. The Exchange notes that the proposed rule change is generally intended to codify and to add certain system functionality to the Exchange's System in order to provide a consistent technology offering for the Cboe Affiliated Exchanges. The Exchange further notes that a consistent technology offering will simplify the technology implementation changes and maintenance by Trading Permit Holders of the Exchange that are also participants on Cboe Affiliated Exchanges. The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. Therefore, the Commission hereby waives the 30-day operative delay and designates the proposed rule change as operative on November 29, 2018.\20\ --------------------------------------------------------------------------- \18\ 17 CFR 240.19b-4(f)(6). \19\ 17 CFR 240.19b-4(f)(6)(iii). \20\ 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 the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. 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 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-CboeBZX-2018-082 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-CboeBZX-2018-082. 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-CboeBZX-2018-082 and should be submitted on or before December 18, 2018. --------------------------------------------------------------------------- \21\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\21\ Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-25733 Filed 11-26-18; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 83, No. 228 / Tuesday, November 27, 2018 / Notices 60921
SECURITIES AND EXCHANGE approximately $4,222,360 ($11,320 × Rule 19b–4(f)(6) thereunder.4 The
COMMISSION 373 = $4,222,360). Commission is publishing this notice to
This rule does not involve the solicit comments on the proposed rule
Submission for OMB Review; collection of confidential information. change from interested persons.
Comment Request An agency may not conduct or
I. Self-Regulatory Organization’s
sponsor, and a person is not required to
Upon Written Request, Copies Available Statement of the Terms of Substance of
respond to, a collection of information
From: Securities and Exchange the Proposed Rule Change
under the PRA unless it displays a
Commission, Office of FOIA Services, currently valid OMB control number. Cboe BZX Exchange, Inc. (the
100 F Street NE, Washington, DC The public may view background ‘‘Exchange’’ or ‘‘BZX Options’’)
20549–2736. documentation for this information proposes to amend its Rules regarding
Extension: collection at the following website: how the System handles Market Orders
Rule 17Ad–15, SEC File No. 270–360, www.reginfo.gov. Comments should be in series with no bid or no offer.
OMB Control No. 3235–0409 directed to: (i) Desk Officer for the (additions are italicized; deletions are
Notice is hereby given that pursuant Securities and Exchange Commission, [bracketed])
to the Paperwork Reduction Act of 1995 Office of Information and Regulatory * * * * *
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the Affairs, Office of Management and
Rules of Cboe BZX Exchange, Inc.
Securities and Exchange Commission Budget, Room 10102, New Executive
(‘‘Commission’’) has submitted to the Office Building, Washington, DC 20503, * * * * *
Office of Management and Budget or by sending an email to: Rule 21.17. Additional Price Protection
(‘‘OMB’’) a request for approval of Lindsay.abate@omb.eop.gov; and (ii) Mechanisms and Risk Controls
extension of the previously approved Charles Riddle, Acting Director/Chief The System’s acceptance and execution of
collection of information provided for in Information Officer, Securities and orders and quotes are subject to the price
Rule 17Ad–15 (17 CFR 240.17Ad–15) Exchange Commission, c/o Candace protection mechanisms and risk controls in
under the Securities Exchange Act of Kenner, 100 F Street NE, Washington, Rule 21.16, this Rule 21.17 and as otherwise
1934 (15 U.S.C. 78a et seq.). DC 20549, or by sending an email to: set forth in the Rules. All numeric values
PRA_Mailbox@sec.gov. Comments must established by the Exchange pursuant to this
Rule 17Ad–15 (17 CFR 240.17Ad–15) Rule will be maintained by the Exchange in
under the Securities Exchange Act of be submitted to OMB within 30 days of publicly available specifications and/or
1934 (15 U.S.C. 78a et seq.) (the ‘‘Act’’) this notice. published in a Regulatory Circular. Unless
requires the approximately 373 transfer Dated: November 20, 2018. otherwise specified the price protections set
agents to establish written standards for Eduardo A. Aleman, forth in this Rule, including the numeric
the acceptance or rejection of guarantees values established by the Exchange, may not
Assistant Secretary. be disabled or adjusted. The Exchange may
of securities transfers from eligible
[FR Doc. 2018–25720 Filed 11–26–18; 8:45 am] share any of a User’s risk settings with the
guarantor institutions. Transfer agents
BILLING CODE 8011–01–P Clearing Member that clears transactions on
are required to establish procedures to behalf of the User.
ensure that those standards are used by (a)–(d) No change.
the transfer agent to determine whether SECURITIES AND EXCHANGE (e) Market Orders in No-Bid (Offer) Series.
to accept or reject guarantees from COMMISSION (1) If the System receives a sell Market
eligible guarantor institutions. Transfer Order in a series after it is open for trading
agents must maintain, for a period of [Release No. 34–84631; File No. SR– with an NBB of zero:
three years following the date of a CboeBZX–2018–082] (A) if the NBO in the series is less than or
rejection of transfer, a record of all equal to $0.50, then the System converts the
transfers rejected, along with the reason Self-Regulatory Organizations; Cboe Market Order to a Limit Order with a limit
BZX Exchange, Inc.; Notice of Filing price equal to the minimum trading
for the rejection, identification of the increment applicable to the series and enters
guarantor, and whether the guarantor and Immediate Effectiveness of a
Proposed Rule Change Relating To the order into the BZX Options Book with a
failed to meet the transfer agent’s timestamp based on the time it enters the
guarantee standard. These Amend Its Rules Regarding How the
Book. If the order has a Time-in-Force of GTC
recordkeeping requirements assist the System Handles Market Orders in or GTD that expires on a subsequent day, the
Commission and other regulatory Series With No Bid or No Offer order remains on the Book as a Limit Order
agencies with monitoring transfer agents until it executes, expires, or the User cancels
November 20, 2018.
and ensuring compliance with the rule. it.
Pursuant to Section 19(b)(1) of the (B) if the NBO in the series is greater than
There are approximately 373 Securities Exchange Act of 1934 (the $0.50, then the System cancels or rejects the
registered transfer agents. The staff ‘‘Act’’),1 and Rule 19b–4 thereunder,2 market order.
estimates that each transfer agent will notice is hereby given that on November (2) If the System receives a buy market
spend about 40 hours annually to 16, 2018, Cboe BZX Exchange, Inc. (the order in a series after it is open for trading
comply with Rule 17Ad–15, or a total of ‘‘Exchange’’ or ‘‘BZX’’) filed with the with an NBO of zero, the System cancels or
14,920 hours for all transfer agents (373 Securities and Exchange Commission rejects the market order.
× 40 hours = 14,920 hours). The (the ‘‘Commission’’) the proposed rule * * * * *
Commission staff estimates that change as described in Items I and II The text of the proposed rule change
compliance staff work at each registered below, which Items have been prepared is also available on the Exchange’s
transfer agent will result in an internal by the Exchange. The Exchange filed the website (http://www.cboe.com/
amozie on DSK3GDR082PROD with NOTICES1
cost of compliance (at an estimated proposal as a ‘‘non-controversial’’ AboutCBOE/
hourly wage of $283) of $11,320 per proposed rule change pursuant to CBOELegalRegulatoryHome.aspx), at
year per transfer agent (40 hours × $283 Section 19(b)(3)(A)(iii) of the Act 3 and the Exchange’s Office of the Secretary,
per hour = $ 11,320 per year). Therefore, and at the Commission’s Public
the aggregate annual internal cost of 1 15 U.S.C. 78s(b)(1). Reference Room.
compliance for the approximately 373 2 17 CFR 240.19b–4.
registered transfer agents is 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(6).
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![60924 Federal Register / Vol. 83, No. 228 / Tuesday, November 27, 2018 / Notices
Commission to waive the 30-day • Send an email to rule-comments@ SECURITIES AND EXCHANGE
operative delay so that the proposed sec.gov. Please include File Number SR– COMMISSION
rule change may become effective and CboeBZX–2018–082 on the subject line.
operative on November 29, 2018. The [Release No. 34–84635; File No. SR–NYSE–
Exchange states that waiver of the Paper Comments
2018–56]
operative delay will provide Users with • Send paper comments in triplicate
additional flexibility to manage and Self-Regulatory Organizations; New
to Secretary, Securities and Exchange
display their orders and provide York Stock Exchange LLC; Notice of
Commission, 100 F Street NE,
additional control over their executions Filing and Immediate Effectiveness of
on the Exchange as soon as possible. Washington, DC 20549–1090.
Proposed Rule Change To Amend
The Exchange further states that waiver All submissions should refer to File Article II, Section 2.03(h)(ii) and Article
of the operative delay will allow the Number SR-CboeBZX–2018–082. This VI of Its Operating Agreement
Exchange to continue to strive towards file number should be included on the
a complete technology integration of the subject line if email is used. To help the November 20, 2018.
Cboe Affiliated Exchanges, with gradual Commission process and review your
roll-outs of new functionality to ensure Pursuant to Section 19(b)(1)1 of the
comments more efficiently, please use Securities Exchange Act of 1934
the stability of the System. The only one method. The Commission will
Exchange notes that the proposed rule (‘‘Act’’) 2 and Rule 19b–4 thereunder,3
post all comments on the Commission’s notice is hereby given that on November
change is generally intended to codify
internet website (http://www.sec.gov/ 14, 2018, New York Stock Exchange
and to add certain system functionality
to the Exchange’s System in order to rules/sro.shtml). Copies of the LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with
provide a consistent technology offering submission, all subsequent the Securities and Exchange
for the Cboe Affiliated Exchanges. The amendments, all written statements Commission (‘‘Commission’’) the
Exchange further notes that a consistent with respect to the proposed rule proposed rule change as described in
technology offering will simplify the change that are filed with the Items I, II, and III below, which Items
technology implementation changes and Commission, and all written have been prepared by the Exchange.
maintenance by Trading Permit Holders communications relating to the The Commission is publishing this
of the Exchange that are also proposed rule change between the notice to solicit comments on the
participants on Cboe Affiliated Commission and any person, other than proposed rule change from interested
Exchanges. The Commission believes those that may be withheld from the persons.
that waiver of the 30-day operative public in accordance with the
delay is consistent with the protection provisions of 5 U.S.C. 552, will be I. Self-Regulatory Organization’s
of investors and the public interest. available for website viewing and Statement of the Terms of Substance of
Therefore, the Commission hereby printing in the Commission’s Public the Proposed Rule Change
waives the 30-day operative delay and Reference Room, 100 F Street NE,
designates the proposed rule change as The Exchange proposes to agreement
Washington, DC 20549 on official [sic] to harmonize certain provisions
operative on November 29, 2018.20 business days between the hours of
At any time within 60 days of the with similar provisions in the governing
10:00 a.m. and 3:00 p.m. Copies of the documents of the Exchange’s national
filing of the proposed rule change, the
Commission summarily may filing also will be available for securities exchange affiliates and parent
temporarily suspend such rule change if inspection and copying at the principal companies, as well as make clarifying,
it appears to the Commission that such office of the Exchange. All comments technical and conforming changes. The
action is: (i) Necessary or appropriate in received will be posted without change. proposed rule change is available on the
the public interest; (ii) for the protection Persons submitting comments are Exchange’s website at www.nyse.com, at
of investors; or (iii) otherwise in cautioned that we do not redact or edit the principal office of the Exchange, and
furtherance of the purposes of the Act. personal identifying information from at the Commission’s Public Reference
If the Commission takes such action, the comment submissions. You should Room.
Commission shall institute proceedings submit only information that you wish
to determine whether the proposed rule to make available publicly. All II. Self-Regulatory Organization’s
should be approved or disapproved. submissions should refer to File Statement of the Purpose of, and
Number SR–CboeBZX–2018–082 and Statutory Basis for, the Proposed Rule
IV. Solicitation of Comments Change
should be submitted on or before
Interested persons are invited to December 18,2018.
submit written data, views, and In its filing with the Commission, the
arguments concerning the foregoing, For the Commission, by the Division of self-regulatory organization included
including whether the proposed rule Trading and Markets, pursuant to delegated statements concerning the purpose of,
change is consistent with the Act. authority.21 and basis for, the proposed rule change
Comments may be submitted by any of Eduardo A. Aleman, and discussed any comments it received
the following methods: Assistant Secretary. on the proposed rule change. The text
[FR Doc. 2018–25733 Filed 11–26–18; 8:45 am] of those statements may be examined at
Electronic Comments
the places specified in Item IV below.
• Use the Commission’s internet BILLING CODE 8011–01–P
The Exchange has prepared summaries,
amozie on DSK3GDR082PROD with NOTICES1
comment form (http://www.sec.gov/ set forth in sections A, B, and C below,
rules/sro.shtml); or of the most significant parts of such
statements.
20 For purposes only of waiving the 30-day
operative delay, the Commission has also
1 15 U.S.C.78s(b)(1).
considered the proposed rule’s impact on
2 15 U.S.C. 78a.
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f). 21 17 CFR 200.30–3(a)(12). 3 17 CFR 240.19b–4.
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Document Created: 2018-11-27 01:25:12
Document Modified: 2018-11-27 01:25:12
| 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 60921 |
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