[Federal Register Volume 84, Number 194 (Monday, October 7, 2019)]
[Notices]
[Pages 53487-53489]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21730]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87187; File No. SR-CBOE-2019-072]


Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Make 
Minor Updates to and Relocate Chapter XIX, Which Governs the Hearings 
and Review Process for Persons Aggrieved by Exchange Action, of the 
Currently Effective Rulebook, to Proposed Chapter 15 of the Shell 
Structure for the Exchange's Rulebook

October 1, 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 September 27, 2019, Cboe Exchange, Inc. (the ``Exchange'' or 
``Cboe Options'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I, 
and II below, which Items have been prepared by the Exchange. The 
Exchange filed the proposal as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 
19b-4(f)(6) thereunder.\4\ The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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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 Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes 
to make minor updates to and relocate Chapter XIX, which governs the 
hearings and review process for persons aggrieved by Exchange action, 
of the currently effective Rulebook (``current Rulebook'') to proposed 
Chapter 15 of the shell structure for the Exchange's Rulebook that will 
become effective upon the migration of the Exchange's trading platform 
to the same system used by the Cboe Affiliated Exchanges (as defined 
below) (``shell Rulebook''). 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
    In 2016, the Exchange's parent company, Cboe Global Markets, Inc. 
(formerly named CBOE Holdings, Inc.) (``Cboe Global''), which is also 
the parent company of Cboe C2 Exchange, Inc. (``C2''), acquired Cboe 
EDGA Exchange, Inc. (``EDGA''), Cboe EDGX Exchange, Inc. (``EDGX'' or 
``EDGX Options''), Cboe BZX Exchange, Inc. (``BZX'' or ``BZX 
Options''), and Cboe BYX Exchange, Inc. (``BYX'' and, together with 
Cboe Options, C2, 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. Cboe Options intends to migrate its trading platform to the 
same system used by the Cboe Affiliated Exchanges, which the Exchange 
expects to complete on October 7, 2019. In connection with this 
technology migration, the Exchange has a shell Rulebook that resides 
alongside its current Rulebook, which shell Rulebook will contain the 
Rules that will be in place upon completion of the Cboe Options 
technology migration.
    The Exchange proposes to relocate and reorganize current Chapter 
XIX, which governs the hearings and review process for persons 
aggrieved by Exchange action, into proposed Chapter 15 in the shell 
Rulebook. The Exchange notes that in addition to relocating and 
reorganizing the current rules, the proposed rule change deletes these 
rules from the current Rulebook. The proposed rule change relocates 
and, where applicable, reorganizes the rules as follows:

------------------------------------------------------------------------
               Shell rule                          Current rule
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15.1 Scope.............................  19.1 Scope, which incorporates
                                          19.1.01 into body of rule.
15.2 Submission of Application to        19.2 Submission of Application
 Exchange.                                to Exchange.
15.3 Procedure Following Applications    19.3 Procedure Following
 for Hearing.                             Applications for Hearing.
15.4 Hearing...........................  19.4 Hearing, which
                                          incorporates 19.4.01 into body
                                          of shell 15.4(a).
15.5 Review............................  19.5 Review.
15.6 Miscellaneous Provisions..........  19.6 Miscellaneous Provisions.
15.7 Requests for Verification of Fees
 and Charges:
    15.7(a)............................  19.50 Scope of Part B.
    15.7(b)............................  19.51 Definitions.

[[Page 53488]]

 
    15.7(c)-(f)........................  19.52 Requests for
                                          Verification.
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    The proposed rule changes make only non-substantive changes to the 
rules in order to update and/or headings that better flow with the 
relocated and reorganized rules, update cross-references to other rules 
and chapters that will be implemented upon migration, update certain 
technical text formatting that will be used in the Rules upon migration 
(e.g., using words for numbers below 10 in the rule text and numerals 
for numbers above 10 in the rule text), incorporate defined terms, and 
reformat the paragraph lettering and numbering.
    Additionally, the proposed rule change deletes ``Part B'' from the 
current rule, as there is no Part A, and combines all rule provisions 
in current Part B into a single rule, as they all relate to a procedure 
that may be used instead of the procedure set forth in current Rules 
19.1 through 19.6 (proposed Rules 15.1 through 15.6) if permitted by 
the Rules. The Exchange believes this reorganization simplifies these 
Rules and eliminates potential confusion given the lack of a Part A in 
this Chapter.
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.\5\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \6\ 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) \7\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ Id.
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    The proposed rule change does not make any substantive changes to 
the rules and is merely intended to consolidate and reorganize the 
Exchange's Rules in anticipation of the technology migration on October 
7, 2019. The Exchange believes that the non-substantive proposed 
changes, which update technical text and formatting (e.g., paragraph 
headings and number-related references), update rule cross-references, 
and consolidate and reorganize rules and rule paragraphs and/or 
Interpretations and Policies, will foster cooperation and coordination 
with those facilitating transactions in securities and remove 
impediments to and perfect the mechanism of a free and open market and 
national market system by simplifying the Exchange Rules and Rulebook 
as a whole, and making its Rules easier to follow and understand, which 
will also result in less burdensome and more efficient regulatory 
compliance.

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 reiterates that 
the proposed rule change is being proposed in the context of a 
technology migration of the Cboe Affiliated Exchanges, and not as a 
competitive filing. The Exchange does not believe that the proposed 
rule change will impose any burden on intramarket competition because 
it does not make any substantive changes to the current Exchange Rules. 
The proposed rule change merely intends to provide consolidated rules 
upon migration and is consistent with the technical text and formatting 
in the shell Rulebook that will be in place come October 7, 2019. The 
Exchange does not believe that the proposed rule change will impose any 
burden on intermarket competition because the proposed rules are the 
same as the Exchange's current rules, all of which have all been 
previously filed with the Commission.

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) of the Act \8\ and Rule 19b-
4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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 that requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \10\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \11\ 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. The 
Exchange believes that waiver of the operative delay is appropriate 
because, as the Exchange discussed above, its proposal does not make 
any substantive changes to the Exchange Rules, and only consolidates 
and reorganizes the rules in Chapter XIX, which governs the hearings 
and review process for persons aggrieved by Exchange action, and moves 
them to the shell Rulebook that the Exchange wishes to maintain post 
migration. Accordingly, its proposal is designed to preserve its 
hearings and review process rules after October 7, 2019. The Commission 
believes that waiver of the 30-day operative delay is consistent with 
the protection of investors and the public interest because the 
proposal does not raise any new or novel issues

[[Page 53489]]

and makes only non-substantive changes to the rules. Therefore, the 
Commission hereby waives the operative delay and designates the 
proposal as operative upon filing.\12\
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ 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-CBOE-2019-072 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2019-072. 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-CBOE-2019-072 and should be submitted on 
or before October 28, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-21730 Filed 10-4-19; 8:45 am]
BILLING CODE 8011-01-P