[Federal Register Volume 84, Number 116 (Monday, June 17, 2019)]
[Notices]
[Pages 28120-28122]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-12660]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-86086; File No. SR-CboeBZX-2019-052]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Allow
the Exchange To Determine the Availability of Order Types and Times-in-
Force
June 11, 2019.
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 June 3, 2019, 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, II,
and III 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).
---------------------------------------------------------------------------
[[Page 28121]]
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 allow the Exchange to determine the availability of order
types and times-in-force. 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://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), 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 21.1 to provide that the
Exchange may determine which order types and times-in-force are
available on a class or system basis. This proposed change is based on
corresponding Rule 21.1 of the Exchange's affiliated exchange, Cboe
EDGX Exchange, Inc. (``EDGX Options'').\5\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 85797 (May 7, 2019),
84 FR 20920 (May 13, 2019) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change Relating to Amend the
Exchange's Opening Process and add a Global Trading Hours Session
for XSP Options) (SR-CboeEDGX-2019-027).
---------------------------------------------------------------------------
Current Rule 21.1(d) defines an order type on the Exchange as the
unique processing prescribed for designated orders, subject to
restrictions within the rules. Current Rule 21.1(f) defines time-in-
force as the period of time that the System will hold an order, subject
to the restrictions within the rules.
The Exchange now proposes to amend Rules 21.1(d) and 21.1(f) to add
that unless otherwise specified in the Rules or the context indicates
otherwise, the Exchange will determine which order types and time-in-
force, respectively, are available on a class or system basis. The
purpose of this rule change is to provide the Exchange with appropriate
flexibility to address different trading characteristics, market
models, and investor base of each class. This provision is consistent
with Rules 21.1(d) and 21.1(f) of EDGX Options, as well as the rules of
the Exchange's other affiliated exchanges, Cboe C2 Exchange, Inc.
(``C2'') Rule 6.10(a) and Cboe Exchange, Inc. (``Cboe Options'') Rule
6.53, each of which provides these exchanges with the same flexibility.
Overall, the Exchange believes that providing the same rules across the
Exchange and its affiliates regarding the availability of certain order
types and times-in-force will reduce confusion for BZX Options Members
that participate across the multiple affiliated exchanges, particularly
during the fourth quarter of 2019 when Cboe Options will migrate its
technology to the same trading platform used by the Exchange, EDGX
Options, and C2.
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.\6\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \7\ 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) \8\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
\8\ Id.
---------------------------------------------------------------------------
The proposed rule change to provide the Exchange with the
flexibility to determine the availability of order types and times-in-
force on a class and system basis will remove impediments to and
perfect the mechanism of a free and open market and a national market
system by allowing the Exchange to address the specific characteristics
of different classes and different market conditions. The Exchange
believes that this serves to protect investors by ensuring that the
appropriate order types and times-in-force are tailored to the
different class characteristics and by mitigating risks associated with
changing market conditions.
The Exchange also believes that providing consistency between the
Exchange rules and that of its affiliates removes impediments to and
perfects the mechanism of a free and open market and promotes just and
equitable principles of trade, as well as fosters cooperation and
coordination with persons engaged in facilitating transactions in
securities. The proposed rule change provides the Exchange with the
same flexibility currently provided for within its affiliates' rules.
The Exchange believes that this consistency promotes participants'
understanding of the rules across the multiple affiliated exchanges and
promotes a fair and orderly national options market system. The
Exchange also notes that the proposed change is reasonable and does not
affect investor protection because the proposed change does not present
any novel or unique issues, as it has previously been filed with the
Commission.
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 change will impose any burden on intramarket
competition, as the proposed rule change will apply in the same manner
to all order types and/or times-in-force, as the Exchange determines,
from all Members. The Exchange does not believe the proposed rule
change will impose any burden on intermarket competition because the
proposed change provides the Exchange with substantially the same
flexibility as the rules of other exchanges.\9\ Therefore, the Exchange
believes that the proposed rule change will allow it to make
determinations regarding availability of orders that will enable it to
remain competitive as markets and market conditions evolve.
---------------------------------------------------------------------------
\9\ See EDGX Options Rule 21.1(d) and (f); C2 Rule 6.10(a); and
Cboe Options Rule 6.53. See also Miami International Securities
Exchange, LLC (``MIAX'') Rule 516.
---------------------------------------------------------------------------
[[Page 28122]]
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 \10\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\11\
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78s(b)(3)(A)(iii).
\11\ 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.
---------------------------------------------------------------------------
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 will 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-2019-052 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-2019-052. 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-2019-052 and should be submitted
on or before July 8, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
---------------------------------------------------------------------------
\12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-12660 Filed 6-14-19; 8:45 am]
BILLING CODE 8011-01-P