[Federal Register Volume 83, Number 240 (Friday, December 14, 2018)]
[Notices]
[Pages 64397-64401]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27085]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84777; File No. SR-CboeBZX-2018-086]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Relating 
To Amend Its Provision Related to Its Risk Monitor Mechanism

December 10, 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 29, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') proposes to 
amend its provision related to its Risk Monitor Mechanism. The text of 
the proposed rule change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the 
Secretary, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Rule 21.16 which governs the Risk 
Monitor Mechanism.

Background

    By way of background, the Risk Monitor Mechanism providers Users 
\5\ with the ability to manage their order and execution risk. 
Particularly, Rule 21.16 provides that the System will maintain a 
counting program for each User. A User may configure a single counting 
program or multiple counting programs to govern its trading activity 
(i.e., on a per port basis). The counting program counts executions, 
contract volume and notional value, within a specified time period 
established by each User (``specified time period'') and on an absolute 
basis for the trading day (``absolute limits''). The specified time 
period will commence for an option when a transaction occurs in any 
series in such option. The counting program will also count a User's 
executions, contract volume and notional value across all options which 
a User trades (``Firm Category''). When the system determines that a 
User's Specified Engagement Trigger (i.e., a volume trigger, notional 
trigger, count trigger and percentage trigger) has reached its 
established limit, the Risk Monitor Mechanism cancels or rejects such 
User's orders or quotes \6\ in all series of the class and cancels or 
rejects any additional orders or quotes from the User in the class 
until the counting program resets.
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    \5\ See Exchange Rule 1.5(ee). The term ``User'' means any 
Member or Sponsored Participant who is authorized to obtain access 
to the System pursuant to Rule 11.3. As discussed below, the 
Exchange is proposing to replace references to ``Users'' in Rule 
21.16 with ``Member''.
    \6\ See infra discussion accompanying footnotes 6-7 [sic].
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Proposed Rule Change

    The Exchange proposes to amend Rule 21.16 to (i) adopt the Risk 
Monitor Mechanism rule language used by its affiliated exchange, Cboe 
C2 Exchange, Inc. (``C2'') (ii) provide the ability for Users [sic] to 
configure limits applicable to a group of EFIDs, and (iii) adopt a new 
a new risk parameter.

Rule Harmonization

    First, the Exchange proposes to harmonize its Risk Monitor 
Mechanism Rule to that of its affiliated Exchange, C2. Particularly, C2 
Rule 6.14 governs, among other things, its Risk Monitor Mechanism 
functionality. The Exchange notes the functionality of the Risk Monitor 
Mechanism is substantively the same as the Risk Monitor Mechanism on 
BZX. Indeed, the Exchange notes that C2 just recently adopted Rule 6.14 
in connection with the technology migration of C2 onto the options 
platform of EDGX, and at such time conformed its previous Risk Monitor 
Mechanism functionality to the functionality that already existed on 
BZX.\7\ Although the functionality is substantively the same, the rule 
structure and terminology used in the BZX and C2 rules differ. The 
Exchange wishes to provide harmonization with respect to this rule 
across the two exchanges and accordingly proposes to

[[Page 64398]]

conform BZX Rule 21.16 to C2 Rule 6.14(c)(5) (i.e., delete current Rule 
21.16 in its entirety with the exception of subparagraphs (d) and (e), 
which will be relocated as described below, and adopt in whole the 
language from the relevant provisions of C2 Rule 6.14).\8\ As noted 
above, the Exchange is also proposing substantive enhancements to its 
current functionality, which is described further below. The Exchange 
notes that C2 is simultaneously proposing the same Risk Monitor 
Mechanism enhancements and those enhancements are included in the new 
proposed conformed rule language.
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    \7\ See Securities Exchange Act Release No. 83214 (May 11, 
2018), 83 FR 22796 (May 16, 2018) (SR-C2-2018-005).
    \8\ The Exchange notes that it is not proposing to adopt 
subparagraph (c)(5)(E) of C2 Rule 6.14 as such provision relates to 
complex orders, which functionality the Exchange currently does not 
offer.
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    First, the Exchange notes that proposed Rule 21.16 will not use the 
term ``User'', and instead will use the term ``Member''.\9\ The 
Exchange notes that the definition of User is broader than Member, as 
it specifically captures Sponsored Participants. The Exchange believes 
``Member'' is the more appropriate term to use with respect to the Risk 
Monitor Mechanism as the rule describes how the functionality works 
with respect to Members, and not necessarily Sponsored Participants. 
The Exchange notes that it currently does not have any Sponsored 
Participants, and to the extent it expects to have any in the future, 
it will revise the rule as needed to incorporate how the Risk Monitor 
Mechanism would function with respect to Sponsored Participants. The 
Exchange notes that ``User'' will be referred to herein as ``Member''.
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    \9\ See Exchange Rule 1.5(n). The term ``Member'' shall mean any 
registered broker or dealer that has been admitted to membership in 
the Exchange. A Member will have the status of a ``member'' of the 
Exchange as that term is defined in Section 3(a)(3) of the Act. 
Membership may be granted to a sole proprietor, partnership, 
corporation, limited liability company or other organization which 
is a registered broker or dealer pursuant to Section 15 of the Act, 
and which has been approved by the Exchange. The Exchange notes that 
corresponding C2 Rule 6.14(c)(5) will use the term ``TPH'', as 
``Member'' is not a defined term used by C2.
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    Next, in connection with adopting C2's Risk Monitor Mechanism Rule 
language, the Exchange notes that it will be eliminating the term 
``class'' and replacing it with ``underlying''. Specifically, the 
Exchange notes that the Risk Monitor Mechanism is configured to count 
the risk parameters (referred to as ``Specified Engagement Triggers'' 
in current BZX Rule 21.16) across underlying securities or indexes. As 
an example, any option related to Apple (AAPL), would be considered to 
have the same underlying. Accordingly, if a corporate action resulted 
in AAPL1, AAPL and APPL1 one [sic] would be considered to share the 
same underlying symbol AAPL. Only a single symbol-level rule for 
underlying AAPL would be configurable by the Risk Monitor Mechanism. 
The Exchange notes that the term ``underlying'' is also utilized in the 
Exchange's technical specification documents. The Exchange therefore 
believes underlying is a more accurate term to use.
    The Exchange also intends to clarify and codify in the new rule 
language what occurs in the event a Member does not reactivate its 
ability to send quotes or orders after its configured risk parameter 
limits have been reached. Currently, BZX Rule 21.16 explains how a 
Member may reset its counting periods. The proposed rule language 
includes a provision that provides that if the Exchange cancels all of 
a Member's quotes and orders resting in the Book, and the Member does 
not reactivate its ability to send quotes or orders, the block will be 
in effect only for the trading day that the Member reached its limits. 
The Exchange notes this is not a substantive change, but rather is 
current practice, and that its affiliated Exchange, Cboe Options, 
includes similar language in its rules.\10\ The Exchange believes 
adding this provision to the rules provides further transparency in its 
rules and reduces potential confusion as to what would happen in the 
situation where a Member fails to reset the counting program.
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    \10\ See Cboe Options Rule 8.18.
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    In connection with adopting C2's Risk Monitor Mechanism Rule 
language, the Exchange also proposes to include language regarding a 
reset limit. Particularly, C2 Rule 6.14(c)(5)(d)(iii) [sic] (which will 
be renumbered to C2 Rule 6.14(c)(5)(d)(iv) [sic]) provides that the 
Exchange may restrict the number of Member underlying, EFID and EFID 
Group resets per second. The Exchange believes adding this provision to 
its rules provides transparency in the rules that the Exchange can 
impose such a restriction. The Exchange notes this is not a substantive 
change, but rather current practice.
    In connection with the harmonization of C2 Rue [sic] 6.14, the 
Exchange notes that certain terminology is also changing. For example, 
current BZX Rule 21.16, provides that the counting program counts a 
Member's executions, contract volume and notional value across all 
options which a Member trades (``Firm Category''). Going forward, this 
concept will be restated to provide generally that the System will 
count the risk parameters across all underlyings of an EFID (``EFID 
limit''). The Exchange reiterates the concept is the same, but the 
language conforms to C2 rules and makes the rule easier to read.
    The Exchange also proposes to adopt a definition of EFID as it 
proposes to reference EFIDs in proposed BZX Rule 21.16. Particularly, 
the Exchange proposes to add Rule 21.1(k) to define and describe EFIDs. 
Specifically, a Member may obtain one or more EFIDs from the Exchange 
(in a form and manner determined by the Exchange). The Exchange assigns 
an EFID to a Member, which the System uses to identify the Member and 
clearing number for the execution of orders and quotes submitted to the 
System with that EFID.\11\ Each EFID corresponds to a single Member and 
a single clearing number of a Clearing Member with the Clearing 
Corporation. A Member may obtain multiple EFIDs, which may be for the 
same or different clearing numbers. A Member may only identify for any 
of its EFIDs the clearing number of a Clearing Member that is a 
Designated Give Up or Guarantor of the Trading Permit Holder as set 
forth in Rule 21.12. [sic] A Member is able (in a form and manner 
determined by the Exchange) to designate which of its EFIDs may be used 
for each of its ports. If a Member submits an order or quote through a 
port with an EFID not enabled for that port, the System cancels or 
rejects the order or quote. The proposed rule change regarding EFIDs is 
not a substantive change but rather codifies current functionality and 
mirrors current C2 Rule 6.8(b). The Exchange believes including a 
description of the use of EFIDs in the Rules adds transparency to the 
Rules.
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    \11\ The Exchange notes that currently EDGX's [sic] rules refer 
only to the term ``MPID'', which is a Member's market participant 
identifier used for equities trading. The Exchange does not utilize 
MPIDs on its options platform and uses EFIDS instead. EFIDS are 
generally equivalent to MPIDs.
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    The Exchange also notes that the new harmonized rule language 
incorporates the use of the term ``quote'' and ``quotes''.\12\ 
Currently, however, when describing what happens when a Specified 
Engagement Trigger is reached, Rule 21.16(b)(i) only references what 
happens to a Member's ``orders''. The Exchange notes however, that the 
term ``order'' as is used in Rule 21.16 was intended to capture both 
orders and quotes. Particularly, an ``order'' is defined as a firm 
commitment to buy or sell option contracts submitted to the System by a 
Member, and a ``quote'' is defined as a bid or offer entered by a 
Market-Maker as a firm order that updates the Market-Maker's previous

[[Page 64399]]

bid or offer, if any.\13\ Indeed, the Exchange notes that the proposed 
reference to ``quote'' and ``quotes'' is not a substantive change to 
how the Risk Monitor Mechanism currently works or will work going 
forward. Accordingly, the Exchange believes incorporating the term 
``quote'' and ``quotes'' alleviates confusion and better reflects how 
the Risk Monitor Mechanism operates (i.e., both orders and quotes, as 
defined, can be affected). Similarly, the Exchange believes the 
proposal to eliminate the references to a ``User's order size'', 
``Market-Maker's quote size'' and ``displayed and non-displayed size'', 
with respect to how the percentage trigger is calculated is not a 
substantive change. The Exchange notes the trigger is calculated the 
same on BZX and C2, and although proposed BZX Rule 21.16(a)(iv) doesn't 
reference orders and Market-Maker quotes in particular, the calculation 
will not be changing and the Exchange doesn't believe a reference to 
orders and Market-Maker quote size in particular under this provision 
is necessary. Similarly, the Exchange does not believe maintaining a 
reference to ``displayed'' and ``non-displayed'' size is necessary, as 
the Exchange believes the proposed language is broad enough to capture 
both types of orders. The Exchange also reiterates the absence of such 
references is not a substantive change and the calculation of the 
percentage trigger is not changing.
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    \12\ See subparagraph (b), (c) and (d) of proposed EDGX [sic] 
Rule 21.16.
    \13\ See BZX Rules 16.1(a)(42) and (51) and 21.1(c).
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    As noted above, the Exchange is not proposing to eliminate 
subparagraphs (d) or (e) of current BZX Rule 21.16, but rather relocate 
these provisions. The Exchange proposes to first relocate the contents 
of current subparagraph (d) to new subparagraph (d)(vi) of proposed BZX 
Rule 21.16 and clarify that the proposed provision governs ``other 
resets'' (i.e., resets that are not a result from a limit being 
reached).\14\ Particularly, the provision provides the System will 
reset the counting period for absolute limits when a Member refreshes 
its risk limit thresholds. The System will also reset the counting 
program and commence a new specified time period when (i) a previous 
specified time period has expired and a transaction occurs in any 
series of an underlying or (ii) a Member refreshes its risk limit 
thresholds prior to the expiration of the specified time period. The 
Exchange proposes to keep this language as it provides transparency in 
the rules as to when other resets occur without limits being reached. 
Lastly, the Exchange notes that that current subparagraph (e) will be 
included under subparagraph (e) of the new proposed Rule 21.16. 
Particularly, ``new'' subparagraph (e) provides that a Member may also 
engage the Risk Monitor Mechanism to cancel resting bids and offers, as 
well as subsequent orders as set forth in BZX Rule 22.11.\15\
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    \14\ The Exchange notes that C2 is also proposing to add this 
provision to its C2 Rule 6.14 in order to provide further 
transparency in its rules governing the Risk Monitor Mechanism.
    \15\ The Exchange notes that C2 is proposing to also add this 
provision to its C2 Rule 6.14 in order to provide further 
transparency in its rules governing the Risk Monitor Mechanism.
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EFID Groups

    The Exchange next proposes to provide in the rules that in addition 
to underlying limits and EFID limits, the System will be able to count 
each of the risk parameters across all underlyings for a group of EFIDs 
(``EFID Group'')(``EFID Group limit'').\16\ Similar to when a 
underlying limit or EFID limit are reached, when a Member's EFID Group 
limit is reached, the Risk Monitor Mechanism will cancel or reject such 
Member's orders or quotes in all underlying and cancel or reject any 
additional orders or quotes from any EFID within that EFID Group in all 
underlyings until the counting program resets. The System will not 
accept new orders or quotes from any EFID within an EFID Group after an 
EFID Group limit is reached until the Member manually notifies the 
Trade Desk to reset the counting program for the EFID Group, unless the 
Member instructs the Exchange to permit it to reset the counting 
program by submitting an electronic message to the System. The Exchange 
believes each Member is in the best position to determine risk settings 
appropriate for its firm based on its trading activity and business 
needs and that it may be based on a single EFID or EFID Group(s). The 
Exchange notes that its affiliate Exchange, Cboe Exchange, Inc. (``Cboe 
Options'') similarly allows its members to set similar risk parameters 
at the acronym-level (which is similar to an EFID) or firm level 
(similar to an EFID Group).\17\
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    \16\ An EFID may not belong to more than one EFID Group. The 
Exchange notes that the Members determine how many, if any, EFID 
Groups to establish and determine which EFIDs belong to a particular 
EFID Group, if any.
    \17\ See Cboe Options Rule 8.18.
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New Risk Parameter

    The Exchange lastly proposes to adopt a new risk parameter. 
Specifically, under the proposed functionality, a Member may specify a 
maximum number of times that the risk parameters (i.e., volume, 
notional, count and/or percentage) are reached over a specified 
interval or absolute period (``risk trips''). When a risk trip limit 
has been reached, the Risk Monitor Mechanism will cancel or reject a 
Member's orders or quotes pursuant to subparagraph (b) of Rule 21.16. 
The Exchange notes that a similar risk parameter (i.e., a parameter 
based on the number of risk ``incidents'' that occur over a specified 
time) is available on its affiliate Exchange, Cboe Options.\18\ The 
Exchange believes the proposed changes to its Risk Monitor Mechanism 
rule sufficiently allows Members to adjust and adopt parameter inputs 
in accordance with their business models and risk management needs.
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    \18\ See Cboe Options Rule 8.18, which provides that a Hybrid 
Market Maker or a TPH Organization may specify a maximum number of 
Quote Risk Monitor Mechanism (``QRM'') QRM Incidents on an Exchange-
wide basis.
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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.\19\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \20\ 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) \21\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \19\ 15 U.S.C. 78f(b).
    \20\ 15 U.S.C. 78f(b)(5).
    \21\ Id.
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    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.\22\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \23\ requirements that the rules of an exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable

[[Page 64400]]

principles of trade, to foster cooperation and coordination with 
persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest. Additionally, the Exchange 
believes the proposed rule change is consistent with the Section 
6(b)(5) \24\ requirement that the rules of an exchange not be designed 
to permit unfair discrimination between customers, issuers, brokers, or 
dealers.
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    \22\ 15 U.S.C. 78f(b).
    \23\ 15 U.S.C. 78f(b)(5).
    \24\ Id.
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    First, the Exchange believes its proposal to harmonize Rule 21.16 
to C2 Rule 6.14 provides uniformity across affiliated exchange rules 
that govern the same functionality and makes the rule easier to read, 
which reduces potential confusion. The Exchange also proposes to mirror 
C2 Rule 6.14 because it believes consistent rules will increase the 
understanding of the Exchange's operations for Members that are also 
participants on C2. As discussed above, notwithstanding the proposal to 
adopt new terminology and/or the absence of certain references, the 
Exchange intends no substantive changes to the meaning or application 
of Rule 21.16 other than what is described above with respect to EFID 
Groups and the new risk trips parameter. Particularly, the Exchange 
believes the adoption of the definition of ``EFID'' provides 
transparency in the rules and alleviates confusion, as the Exchange 
references EFIDs multiple times throughout proposed Rule 21.16 and 
utilizes EFIDs generally on the Exchange with respect to its options 
platform. The Exchange notes the proposed definition is substantively 
the same as the definition of EFIDs under C2's rules.\25\ The Exchange 
believes the use of ``quote'' and ``quotes'' also alleviates confusion 
as the current Risk Monitor Mechanism in fact affects both orders and 
quotes, as defined, and was intended to cover both a Member's orders 
and Market Maker quotes. Similarly, the Exchange believes using the 
term ``underlying'' instead of ``class'' and ``Member'' instead of 
``user'' alleviates potential confusion as the proposed terms more 
accurately reflect how the Risk Monitor Mechanism operates.
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    \25\ See C2 Rule 6.8(b). The Exchange notes that proposed Rule 
21.1(k)(2) does not include a cross reference to a rule regarding 
Designated Give Ups and Guarantors as BZX rules do not have a 
similar corresponding rule as C2 Rule 6.30.
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    The Exchange believes the rule changes to codify current practice 
alleviates potential confusion, provides transparency in the rules and 
makes the rules easier to read. For example, providing language 
regarding (i) a Member's failure to reset or initiate a reset of the 
counting program and (ii) the Exchange's ability to restrict resets, 
provides transparency in the rules as to what occurs in those 
situations, harmonizes rule language with that of the Exchange's 
affiliated Exchanges, and reduces potential confusion. The alleviation 
of confusion removes impediments to, and perfects the mechanism of, a 
free and open market and a national market system, and, in general, 
protects investors and the public interest.
    The Exchange believes providing Members the ability to configure 
certain risk parameters across underlyings for an EFID Group is also 
appropriate because it permits a Member to protect itself from 
inadvertent exposure to excessive risk on an additional level (i.e., on 
an EFID group-level, not just underlying- or EFID-level). Reducing such 
risk will enable Members to enter quotes and orders with protection 
against inadvertent exposure to excessive risk, which in turn will 
benefit investors through increased liquidity for the execution of 
their orders. Such increased liquidity benefits investors because they 
may receive better prices and because it may lower volatility in the 
options market. The Exchange also believes each Member is in the best 
position to determine risk settings appropriate for its firm based on 
its trading activity and business needs and that that may be based on 
an EFID Group(s). Additionally, as discussed above, Cboe Options 
similarly allows its members to set risk parameters at the acronym-
level (which is similar to an EFID) or firm-level (similar to an EFID 
Group).\26\
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    \26\ See Cboe Options Rule 8.18.
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    Lastly, the Exchange believes the proposal to adopt the new risk 
parameter based on number of times a risk parameter or group of risk 
parameters are reached will provide Members with an additional tool for 
managing risks. Furthermore, as noted above, the Exchange's affiliated 
exchange offers similar functionality.\27\ Overall, the proposed rule 
change provides Members more protections that reduce the risks from 
potential system errors and market events. As a result, the proposed 
changes, including the new risk parameter for the Risk Monitor 
Mechanism, have the potential to promote just and equitable principles 
of trade. Additionally, the proposed changes apply to all Members.
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    \27\ See Cboe Options Rule 8.18.
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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. Rather, the Exchange 
believes that the proposed changes with respect to its Risk Monitor 
Mechanism help promote fair and orderly markets and provide clarity and 
transparency the Rule. For example, the proposed rule change adds an 
additional risk control parameter and flexibility to help further 
prevent potentially erroneous executions, which benefits all market 
participants. The proposed changes apply uniformly to all Members and 
the Exchange notes that the proposed changes apply to all quotes and 
orders in the same manner. Additionally, the Exchange does not believe 
that the proposed rule change will impose any burden on intermarket 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act because the proposed enhancements apply only to 
trading on the Exchange. Additionally, the Exchange notes that it is 
voluntary for the Members to determine whether to make use of the new 
enhancements of the Risk Monitor Mechanism. To the extent that the 
proposed changes may make the Exchange a more attractive trading venue 
for market participants on other exchanges, such market participants 
may elect to become Exchange market participants.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not:
    A. significantly affect the protection of investors or the public 
interest;
    B. impose any significant burden on competition; and
    C. become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, it has 
become effective pursuant to Section 19(b)(3)(A) of the

[[Page 64401]]

Act \28\ and Rule 19b-4(f)(6) thereunder.\29\
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    \28\ 15 U.S.C. 78s(b)(3)(A).
    \29\ 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 pursuant to Rule 19b-4(f)(6) under the 
Act \30\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \31\ 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 Commission to waive the 30-day operative delay to provide 
Members with additional tools and greater flexibility for managing 
their potential risk as soon as possible. Accordingly, 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 operative delay and designates the 
proposal as operative upon filing.\32\
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    \30\ 17 CFR 240.19b-4(f)(6).
    \31\ 17 CFR 240.19b-4(f)(6)(iii).
    \32\ For purposes only of waiving the 30-day operative delay, 
the Commission also has 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 the 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 to 
determine whether the proposed rule change 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 Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-CboeBZX-2018-086 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-2018-086. 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-2018-086 and should be submitted 
on or before January 4, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\33\
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    \33\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2018-27085 Filed 12-13-18; 8:45 am]
 BILLING CODE 8011-01-P