[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:
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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