[Federal Register Volume 84, Number 222 (Monday, November 18, 2019)]
[Notices]
[Pages 63696-63698]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-24863]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87496; File No. SR-CBOE-2019-103]


Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
its Fees Schedule To Waive Fees Relating to Printing

November 8, 2019.

    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on October 31, 2019, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe 
Options'') filed with the Securities and Exchange Commission (``SEC'' 
or ``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. 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.
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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 amend its Fees schedule to waive fees relating to printing. 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''). Cboe Options migrated its trading platform to the same 
system used by the Cboe Affiliated Exchanges, and also migrated its 
current billing system to a new billing system, on October 7, 2019 (the 
``migration''). In connection with the migration, the Exchange proposes 
to waive fees for printer paper and ink from October 7, 2019 through 
October 31, 2019.

[[Page 63697]]

    The Exchange currently assesses paper and ink fees, which apply to 
the paper that the Exchange provides for TPHs on the trading floor for 
use in printing trade tickets. Particularly, the Exchange assesses 
$5.00 per packet of 500 sheets for any printing on an HP Laser Printer, 
$19.50 per roll for Zebra Printer Paper, and $19.50 per roll for Zebra 
Printer Ink. The Exchange notes that in connection with the migration, 
the Exchange has encountered unforeseen issues with its printers that 
are not easily rectifiable. Particularly, the Exchange's printers are 
currently experiencing issues such as printing multiple copies of trade 
tickets and printing the same trade ticket at multiple printers. These 
issues have resulted in a substantial amount of paper and ink being 
consumed inadvertently. As such, the Exchange proposes to waive 
printing paper and ink fees for the period of October 7, 2019 through 
October 31, 2019. The Exchange does not believe it's reasonable to 
assess TPHs the respective printing paper and ink fees in light of the 
malfunctioning of the Exchange's printers. Indeed, absent a waiver of 
these fees during this period, TPHs would incur costs that are outside 
of their control. Additionally, the Exchange notes there is not an easy 
way to ascertain what the ``actual'' printing costs should be for each 
TPHs if not for the printer malfunctioning.
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.\3\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \4\ 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) \5\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(5).
    \5\ Id.
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    Waiving fees for paper and ink from October 7, 2019-October 31, 
2019 is reasonable as TPHs will not pay any fees for paper and ink 
since the time the Exchange's printers began malfunctioning. As noted 
above, in connection with the recent migration, the Exchange has 
experienced unforeseen issues with its printers that are not easily 
rectifiable. The Exchange is in the process of resolving the printing 
issues and cannot say with certainty when the printing issues will 
fixed. The printers currently continue to print substantial amounts of 
trade tickets that have not actually been requested by a TPH. The 
Exchange believes it would therefore be unfair to assess TPHs fees for 
paper and ink they did not request and have no control over. Also as 
noted above, the Exchange cannot easily determine what the ``actual'' 
costs of printing are for each TPH. Therefore waiving the fees from 
October 7, 2019-October 31, 2019 is reasonable. The proposed change 
also is equitable and not unfairly discriminatory because it applies 
uniformly to all TPHs.

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 because the proposed changes 
applies uniformly to all TPHs. The Exchange believes that the proposed 
rule change will not cause an unnecessary burden on intermarket 
competition because it only applies to trading on Cboe Options. To the 
extent that the proposed changes make Cboe Options a more attractive 
marketplace for market participants at other exchanges, such market 
participants are welcome to become Cboe Options 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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \6\ and Rule 19b-4(f)(6) thereunder.\7\ 
Because the 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, if consistent with the protection of 
investors and the public interest, the proposed rule change 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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    \6\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \7\ 17 CFR 240.19b-4(f)(6).
    \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 the Exchange to give the Commission written notice of the 
Exchange's 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 under Rule 19b-4(f)(6) \10\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\11\ the Commission 
may 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 so that the proposed 
rule change may become operative immediately. The Exchange represents 
that it bills its TPHs in arrears; if this filing does not become 
operative upon filing, the Exchange asserts that it will be forced to 
assess the above-described paper and ink fees from October 7, 2019 
through October 31, 2019. The Exchange would then subsequently refund 
such TPHs once this filing were to become operative, which the Exchange 
believes will create unnecessary costs when managing its billing 
process. Based on the foregoing, the Commission believes it is 
consistent with the protection of investors and the public interest for 
the filing to become operative upon filing in order to avoid 
unnecessary complications when the Exchange bills its TPHs for the 
month of October. For this reason, the Commission hereby waives the 30-
day operative delay and designates the proposal 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 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

[[Page 63698]]

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-2019-103 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-2019-103. 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 offices 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-2019-103, and should be submitted 
on or before December 9, 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), (59).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-24863 Filed 11-15-19; 8:45 am]
 BILLING CODE 8011-01-P