[Federal Register Volume 87, Number 76 (Wednesday, April 20, 2022)]
[Notices]
[Pages 23629-23633]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-08388]



[[Page 23629]]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94723; File No. SR-CBOE-2022-015]


Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing of a Proposed Rule Change, as Modified by Amendment No. 1, To 
Amend Rule 10.3 Regarding Margin Requirements

April 14, 2022.
    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 March 30, 2022, 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, II, 
and III below, which Items have been prepared by the Exchange. On April 
13, 2022, the Exchange filed Amendment No. 1 to the proposed rule 
change. The Commission is publishing this notice to solicit comments on 
the proposed rule change, as modified by Amendment No. 1, from 
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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 Rule 10.3 regarding margin requirements. The text of the 
proposed rule change is provided below.

(additions are italicized; deletions are [bracketed])
* * * * *
Rules of Cboe Exchange, Inc.
* * * * *

Rule 10.3. Margin Requirements

    (a)-(b) No change.
    (c) Customer Margin Account--Exception. The foregoing requirements 
are subject to the following exceptions. Nothing in this paragraph (c) 
shall prevent a broker-dealer from requiring margin from any account in 
excess of the amounts specified in these provisions.
    (1)-(4) No change.
    (5) Initial and Maintenance Margin Requirements on Short Options, 
Stock Index Warrants, Currency Index Warrants and Currency Warrants.
    (A)-(B) No change.
    (C) Related Securities Positions--Listed or OTC Options. Unless 
otherwise specified, margin must be deposited and maintained in the 
following amounts for each of the following types of positions.
    (i)-(ii) No change.
    (iii) Covered Calls/Covered Puts. [(a)] No margin is required for a 
call (put) option contract or warrant carried in a short position where 
there is carried in the same account a long (short) position in 
equivalent units of the underlying security.
    [(b) No margin is required for a call (put) index option contract 
or warrant carried in a short position where there is carried in the 
same account a long (short) position in an (1) underlying stock basket, 
(2) index mutual fund, (3) IPR, or (4) IPS, that is based on the same 
index underlying the index option or warrant and having a market value 
at least equal to the aggregate current index value.
    (c)] In order for th[e]is exception[s in subparagraphs (a) and (b) 
above] to apply, in computing margin on positions in the underlying 
security[, underlying stock basket, index mutual fund, IPR or IPS, as 
applicable], ([1]a) in the case of a call, the current market value to 
be used shall not be greater than the exercise price, and ([2]b) in the 
case of a put, margin shall be the amount required by subparagraph 
(b)(2) of this Rule, plus the amount, if any, by which the exercise 
price exceeds the current market value.
    (iv) Exceptions. The following paragraphs set forth the minimum 
amount of margin which must be maintained in margin accounts of 
customers having positions in components underlying options, stock 
index warrants, currency index warrants or currency warrant when such 
components are held in conjunction with certain positions in the 
overlying option or warrant. In respect of an option or warrant on a 
market index, an underlying stock basket is an eligible underlying 
component. The option or warrant must be listed or guaranteed by the 
carrying broker dealer. In the case of a call option or warrant carried 
in a short position, a related long position in the underlying 
component shall be valued at no more than the call option/warrant 
exercise price for margin equity purposes.
    (a) Long Option Offset. When a component underlying an option or 
warrant is carried long (short) in [an] the same account [in which 
there is also carried] as a long put (call) option or warrant 
specifying equivalent units of the underlying component, the minimum 
amount of margin which must be maintained on the underlying component 
is 10% of the option/warrant exercise price plus the out-of-the-money 
amount not to exceed the minimum maintenance required pursuant to 
paragraph (b) of this Rule.
    (b) Conversion. When a call option or warrant carried in a short 
position is covered by a long position in equivalent units of the 
underlying component and there is [also] carried in the same account a 
long put option or warrant specifying equivalent units of the same 
underlying component and having the same exercise price and expiration 
date as the short call option or warrant, the minimum amount of margin 
which must be maintained for the underlying component shall be 10% of 
the exercise price.
    (c) Reverse Conversion. When a put option or warrant carried in a 
short position is covered by a short position in equivalent units of 
the underlying component and there is [also] carried in the same 
account a long call option or warrant specifying equivalent units of 
the same underlying component and having the same exercise price and 
expiration date as the short put option or warrant, the minimum amount 
of margin which must be maintained for the underlying component shall 
be 10% of the exercise price plus the amount by which the exercise 
price of the put exceeds the current market value of the underlying, if 
any.
    (d) Collar. When a call option or warrant carried in a short 
position is covered by a long position in equivalent units of the 
underlying component and there is [also] carried in the same account a 
long put option or warrant specifying equivalent units of the same 
underlying component and having a lower exercise price than, and same 
expiration date as, the short call option/warrant, the minimum amount 
of margin which must be maintained for the underlying component shall 
be the lesser of 10% of the exercise price of the put plus the put out-
of- the-money amount or 25% of the call exercise price.
    (e) Protected Option. When an in-the-money index call (put) option 
contract or warrant is carried in a short position and there is carried 
in the same account a long (short) position in an underlying stock 
basket, non-leveraged index mutual fund or non-leveraged exchange-
traded fund that is based on the same index underlying the index option 
or warrant, the minimum amount of margin which must be maintained on a 
short index call option is 100% of the amount, if any, by which the 
aggregate current index value exceeds the market value of the basket or 
fund; and in the case of a short index put option, 100% of the amount, 
if any, by which the aggregate current index value is below the market 
value of the

[[Page 23630]]

basket or fund. If the index call (put) option contract or warrant 
carried short is at- or out-of-the-money and there is carried in the 
same account a long (short) position in any underlying stock basket, 
non-leveraged index mutual fund or non-leveraged ETF that is based on 
the same index underlying the index option or warrant, no margin is 
required.
* * * * *
    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 proposed rule change amends Rule 10.3 regarding margin 
requirements. Specifically, the Exchange proposes to amend Rule 
10.3(c)(5)(C)(iii)(b) to update the provisions that provide margin 
relief for a cash-settled index option written against a holding in an 
exchange-traded fund that tracks the same index as the index underlying 
the index option. Rule 10.3 sets forth margin requirements, and certain 
exceptions to those requirements, applicable to security positions of 
Trading Permit Holders' (``TPHs'') customers. Rule 10.3(c)(5)(C)(iii) 
currently requires no margin for covered calls and puts. Specifically, 
that rule provides the following:
     No margin is required for a call (put) option contract or 
warrant carried in a short position where there is carried in the same 
account a long (short) position in equivalent units of the underlying 
security.\3\
---------------------------------------------------------------------------

    \3\ In computing margin on such a position in the underlying 
security, (a) in the case of a call, the current market value to be 
used shall not be greater than the exercise price and (b) in the 
case of a put, margin will be the amount required by Rule 
10.3(b)(2), plus the amount, if any, by which the exercise price of 
the put exceeds the current market value of the underlying.
---------------------------------------------------------------------------

     No margin is required for a call (put) index option 
contract or warrant carried in a short position where there is carried 
in the same account a long (short) position in an (1) underlying stock 
basket,\4\ (2) index mutual fund, (3) index portfolio receipt 
(``IPR''),\5\ or (4) index portfolio share (``IPS''),\6\ that is based 
on the same index underlying the index option or warrant and having a 
market value at least equal to the aggregate current index value.
---------------------------------------------------------------------------

    \4\ An ``underlying stock basket'' means a group of securities 
that includes each of the component securities of the applicable 
index and which meets the following conditions: (a) The quantity of 
each stock in the basket is proportional to its representation in 
the index, (b) the total market value of the basket is equal to the 
underlying index value of the index options or warrants to be 
covered, (c) the securities in the basket cannot be used to cover 
more than the number of index options or warrants represented by 
that value and (d) the securities in the basket shall be unavailable 
to support any other option or warrant transaction in the account. 
See Rule 10.3(a)(7).
    \5\ IPRs are securities that (a) represent an interest in a unit 
investment trust (``UIT'') which holds the securities that comprise 
an index on which a series of IPRs is based; (b) are issued by the 
UIT in a specified aggregate minimum number in return for a 
``Portfolio Deposit'' consisting of specified numbers of shares of 
stock plus a cash amount; (c) when aggregated in the same specified 
minimum number, may be redeemed from the UIT, which will pay to the 
redeeming holder the stock and cash then comprising the Portfolio 
Deposit; and (d) pay holders a periodic cash payment corresponding 
to the regular cash dividends or distributions declared and paid 
with respect to the component securities of the stock index on which 
the IPRs are based, less certain expenses and other charges as set 
forth in the UIT prospectus. IPRs are ``UIT interests'' within the 
meaning of the Rules. See Rule 1.1. A UIT Interest is any share, 
unit, or other interest in or relating to a unit investment trust, 
including any component resulting from the subdivision or separation 
of such an interest.
    \6\ IPSs are securities that (a) are issued by an open-end 
management investment company based on a portfolio of stocks or 
fixed income securities designed to provide investment results that 
correspond generally to the price and yield performance of a 
specified foreign or domestic stock index or fixed income securities 
index; (b) are issued by such an open-end management investment 
company in a specified aggregate minimum number in return for a 
deposit of specified number of shares of stock and/or a cash amount, 
or a specified portfolio of fixed income securities and/or a cash 
amount, with a value equal to the next determined net asset value; 
and (c) when aggregated in the same specified minimum number, may be 
redeemed at a holder's request by such open-end management 
investment company, which will pay to the redeeming holder stock 
and/or cash, or a specified portfolio of fixed income securities 
and/or cash with a value equal to the next determined net asset 
value. See Rule 1.1.
---------------------------------------------------------------------------

     In order for the exceptions in the previous bullets to 
apply, in computing margin on positions in the underlying security, 
underlying stock basket, index mutual fund, IPR or IPS, as 
applicable,\7\ (1) in the case of a call, the current market value to 
be used shall not be greater than the exercise price, and (2) in the 
case of a put, margin shall be the amount required by subparagraph 
(b)(2) of Rule 10.3, plus the amount, if any, by which the exercise 
price exceeds the current market value.
---------------------------------------------------------------------------

    \7\ IPRs and IPSs are commonly referred to as ETFs.
---------------------------------------------------------------------------

    Rule 10.3(c)(5) generally requires TPHs to obtain from a customer, 
and maintain, a margin deposit for short cash-settled index options in 
an amount equal to 100% of the current market value of the option plus 
15% (if overlying a broad-based index) or 20% (if overlying a narrow-
based index) of the amount equal to the index value multiplied by the 
index multiplier minus the amount, if any, by which the option is out-
of-the-money.\8\ The minimum margin required for such an option is 100% 
of the option current market value plus 10% of the index value 
multiplied by the index multiplier for a call or 10% of the exercise 
price multiplied by the index multiplier for a put.
---------------------------------------------------------------------------

    \8\ The out-of-the-money amount for a call is any excess of the 
aggregate exercise price of the option or warrant over the product 
of the current (spot or cash) index value and the applicable 
multiplier. The out-of-the-money amount for a put is any excess of 
the product of the current (spot or cash) index value and the 
applicable multiplier over the aggregate exercise price of the 
option or warrant.
---------------------------------------------------------------------------

    Pursuant to current Rule 10.3(c)(5)(C)(iii)(b) and (c), however, a 
TPH needs to require no margin deposit for a short cash-settled index 
call option if the TPH is holding in the same account a long position 
in an ETF that tracks the same index underlying the index option \9\ if 
the current market value of the ETF for margin purposes (1) is at least 
equal to the aggregate current index value and (2) is not greater than 
the exercise price. If an account is short a cash-settled index put 
option and is holding in the same account a short position in the ETF, 
a TPH needs to require a margin deposit for the amount required by Rule 
10.3(b)(2) \10\ plus the

[[Page 23631]]

amount, if any, by which the exercise price of the option exceeds the 
market value of the ETF if the market value of the ETF is at least 
equal to the aggregate current index value.
---------------------------------------------------------------------------

    \9\ This is the same margin treatment that applies to an option 
on an equity security written against the underlying security. See 
current Rule 10.3(c)(5)(C)(iii)(a).
    \10\ Rule 10.3(b)(2) provides the minimum amount of margin that 
must be maintained in customer margin accounts having positions in 
securities is: (1) With respect to long positions, 25% of the 
current market value of all long in the account; plus (2) with 
respect to short positions, (a) $2.50 per share or 100% of the 
current market value, whichever is greater, of each security short 
in the account that has a current market value of less than $5.00 
per share; plus (b) $5.00 per share or 30% of the current market 
value, whichever is greater, of each security short in the account 
that has a current market value of $5.00 per share or more.
---------------------------------------------------------------------------

    The Exchange proposes to amend this exception to margin 
requirements applicable to short option positions or warrants on 
indexes that are offset by positions in an underlying stock basket, 
non-leveraged index mutual fund, or non-leveraged exchange-traded fund 
(collectively referred to as ``ETFs'') that is based on the same index 
option, as well as move it within Rule 10.3 to Rule 
10.3(c)(5)(C)(iv).\11\ Specifically, the proposed rule change adopts 
the following as Rule 10.3(c)(5)(C)(iv)(e): \12\
---------------------------------------------------------------------------

    \11\ Proposed paragraph (e) limits the margin relief to index 
options written against an underlying stock basket, non-leveraged 
index mutual fund or non-leveraged exchange-traded fund (compared to 
underlying stock basket, index mutual fund, IPR, or IPS in current 
subparagraph (iii)(b)). The Exchange proposes to add the non-
leveraged limitation to clarify that this exception is not intended 
to and does not apply to leveraged instruments. Additionally, the 
Exchange excludes IPRs and IPSs from being eligible for the margin 
relief in paragraph (e), as the Exchange understands that the use 
and availability of these products has diminished and has not 
observed the writing of index options against them.
    \12\ The proposed rule change identifies the strategy described 
in proposed subparagraph (e) as a ``protected option,'' which is a 
strategy of writing an index option against a holding in an ETF 
based on the same index as the index option, to differentiate it 
from a ``covered call,'' which is a strategy of writing an option 
against a position in an underlying security (the margin treatment 
for which is described in current subparagraph (iii)(a)).
---------------------------------------------------------------------------

    When an in-the-money index call (put) option contract or warrant is 
carried in a short position and there is carried in the same account a 
long (short) position in an underlying stock basket, non-leveraged 
index mutual fund or non-leveraged exchange-traded fund that is based 
on the same index underlying the index option or warrant, the minimum 
amount of margin which must be maintained on a short index call option 
is 100% of the amount, if any, by which the aggregate current index 
value exceeds the market value of the basket or fund; and in the case 
of a short index put option, 100% of the amount, if any, by which the 
aggregate current index value is below the market value of the basket 
or fund. If the index call (put) option contract or warrant carried 
short is at- or out-of-the-money and there is carried in the same 
account a long (short) position in any underlying stock basket, non-
leveraged index mutual fund or non-leveraged ETF that is based on the 
same index underlying the index option or warrant, no margin is 
required.\13\
---------------------------------------------------------------------------

    \13\ The Exchange understands that FINRA intends to submit a 
proposed rule change to adopt the same provision in its rules 
following Commission approval of this proposed rule change.
---------------------------------------------------------------------------

    The proposed rule change amends the form of margin a TPH is 
required to hold in an account for a short in-the-money index call 
(put) option if there is a long position in an ETF based on the same 
index to be the amount by which the value of an ETF is below (above) 
the aggregate index value. Rather than necessitating the purchase or 
deposit of additional ETF shares to address a deficiency in the value 
of the ETF compared to the aggregate index value (regardless of the 
amount of the deficiency), as required by current rules, the proposed 
rule change will enable excess maintenance margin equity in a margin 
account to support the requirement. If excess maintenance margin is 
insufficient or nonexistent, the TPH would need to require a deposit of 
margin which can be in any form (e.g., cash and/or marginable 
securities) from the account owner in an amount equal to any 
deficit.\14\ Additionally, the proposed rule change will require no 
margin when an option is at- or out-of-the-money, regardless of whether 
the ETF market value is at least equal to the aggregate index value.
---------------------------------------------------------------------------

    \14\ Pursuant to the current Rules, if the ETF market value is 
not at least equal to the aggregate index value, and additional 
shares are not purchased or deposited, then the required margin is 
equal to the amount of the option current market value plus 15% (if 
a broad-based index) or 20% (if a narrow-based index) of the 
aggregate index value minus any out-of-the-money amount, subject to 
a minimum requirement.
---------------------------------------------------------------------------

    The Exchange believes the proposed rule change is more reasonable 
and practical than the current requirements, as clearing firms will no 
longer need to constantly monitor the value of an ETF and compare it to 
the aggregate current index value and see to it that an account owner 
deposits or purchases additional ETF shares to address any deficiencies 
in order to satisfy the margin exception in the rule. As a result, the 
Exchange believes the proposed rule may reduce the operational cost of 
the protected option strategy, which may make this strategy more 
beneficial to customers. While the structure of ETFs and market forces 
may cause an ETF's price to differ slightly in value from the index 
value, the Exchange has observed that these values are highly 
correlated and do not deviate significantly. Therefore, the Exchange 
believes the proposed margin requirement for protected in-the-money 
index options is an effective safeguard against the risk of a short 
option position.
    The proposed rule change also eliminates the need for margin for an 
at-the-money or out-of-the-money protected index option, regardless of 
the value of the ETF. Currently, if the market value of an ETF was less 
(if a call) or more (if a put) than the current aggregate index value, 
the ETF position must be supplemented to address the deficiency. Due to 
the high correlation between the values of an ETF and an index, as 
noted above, the amount of margin necessary to address such deficiency 
would be minimal. In addition, given that options are unlikely to be 
assigned/exercised when they are at- or out-of-the-money, the need for 
such margin is also minimal. Therefore, the Exchange believes the cost 
to TPHs to monitor the need for margin for options that are unlikely to 
be assigned/exercised is not justified and unnecessary given the 
minimal margin amounts that would ultimately be necessary to cover the 
likely small deficiencies between the values of an ETF and index.
    Additionally, the proposed rule change eliminates the requirement 
to mark the price of a long ETF with an index call option written 
against it at the lower of the ETF's market value or the index option 
strike price. With covered call options, this requirement is intended 
to cap favorable moves in the price of the underlying security at the 
strike price because moves above the strike price will not be realized. 
Currently, the Exchange applies this same requirement to protected 
options written against ETF holdings to maintain equivalency with the 
treatment of covered options. However, unlike stocks, favorable moves 
in the price of an underlying ETF may be realized because, if a short 
index option is assigned, the ETF shares are not sold (in the case of a 
long ETF/short call) or purchased (in the case of a short ETF/short 
put). Thus, favorable moves in the ETF price are not capped at the 
strike price. As a result, the Exchange believes it is appropriate to 
no longer apply this requirement to protected options written against 
ETF holdings.
    In connection with this change, the proposed rule change deletes 
Rule 10.3(c)(5)(C)(iii)(b), as well as the cross-reference to such 
paragraph and the references to underlying stock basket, index mutual 
fund, IPR or IPS, as applicable,\15\ in current subparagraph (c), as 
those terms relate specifically to current subparagraph (b). Because 
this would leave only one section in Rule 10.3(c)(5)(C)(iii), the 
proposed rule change deletes subparagraph lettering and combines 
current subparagraph (iii)(a) and current subparagraph (iii)(c) into a 
single provision as subparagraph

[[Page 23632]]

(iii) and makes corresponding conforming changes.
---------------------------------------------------------------------------

    \15\ These terms are related only to current subparagraph (b).
---------------------------------------------------------------------------

    The proposed rule change also makes clarifying, nonsubstantive 
changes in each subparagraph of Rule 10.3(c)(5)(C)(iv) to conform 
language in those subparagraphs to language used throughout Rule 10.3. 
Specifically, the proposed rule change amends the provision of each 
subparagraph to state that the minimum amount of required margin in the 
circumstances described in each subparagraph applies when the 
applicable long position is carried ``in the same account as'' the 
applicable short position, rather than ``also carried.'' This language 
is consistent with the language in, for example, current Rule 
10.3(c)(5)(C)(iii), as margin requirements are determined generally 
based on positions held in the same account.
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.\16\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \17\ 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) \18\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers. The Exchange further believes the proposed rule 
change furthers the objectives of Section 6(c)(3) of the Act,\19\ which 
authorizes the Exchange to, among other things, prescribe standards of 
financial responsibility or operational capability and standards of 
training, experience and competence for its Trading Permit Holders and 
person associated with Trading Permit Holders.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78f(b).
    \17\ 15 U.S.C. 78f(b)(5).
    \18\ Id.
    \19\ 15 U.S.C. 78f(c)(3).
---------------------------------------------------------------------------

    In particular, the proposed rule change amends a specific margin 
treatment related to short index options written against ETFs in the 
same manner. Given the difference described above between short stock 
options written against the underlying stock and short index options 
written against ETFs, the Exchange believes it is reasonable to apply 
different margin treatments to these different strategies. While the 
economic outcomes of covered options and protected options are similar, 
as described above, the Exchange believes it promotes just and 
equitable principles of trade to apply margin slightly differently to 
protected options than covered options given the possibility of 
realizing gains in ETFs above the exercise prices that is not a 
possibility for covered options. While the proposed rule change may 
result in lower margin requirements for protected option strategies, 
the Exchange believes the proposed margin amounts are more reasonable 
than the current requirements, as they are more tailored to these 
strategies and reflect the potential deficiencies between the value of 
the ETF and the value of the index. As a result, the Exchange believes 
the proposed margin required will still be sufficient for protected 
option strategies. Given the high correlation between these values, the 
Exchange believes it is appropriate to require margin in an amount 
necessary to only cover this deficiency, as ultimately that is the risk 
against which the margin requirement is protecting. Additionally, the 
Exchange believes the burdens associated with the current margin 
requirements for short at- and out-of-the-money index options outweigh 
the benefits of the likely minimal margin that is required for options 
that are unlikely to be assigned/exercised. Additionally, as discussed 
above, the proposed rule change may reduce the operational burden of 
protected option strategies, which the Exchange believes may make the 
strategies more beneficial for customers and thus remove impediments to 
and perfect the mechanism of a free and open market, as well as reduce 
the margin required for such strategies, which will potentially free up 
capital that can be put back into the market, which ultimately benefits 
investors.
    The proposed clarifying, nonsubstantive changes provide for more 
consistent language in similar rule provisions, which will ultimately 
benefit investors.

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 that the proposed rule change will impose any burden on 
intramarket competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, as it will apply the same 
margin treatment to all TPHs. The Exchange does not believe that the 
proposed rule change will impose any burden on intermarket competition, 
as the Exchange expects FINRA to adopt a similar rule change, and 
several other options exchanges incorporate by reference the Exchange's 
margin rules into their rules (and thus apply them to their members). 
Additionally, as discussed above, the proposed rule change may reduce 
the operational burden of protected option strategies, as well as 
reduce the margin required for such strategies, which may make the 
strategies more beneficial for customers. The proposed rule change is 
not intended as a competitive filing, but rather to modify margin 
requirements for a certain option strategy to be more reasonable and 
practical.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission will:
    A. By order approve or disapprove such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule 
change should be 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:

[[Page 23633]]

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-2022-015 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-2022-015. 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-2022-015 and should be submitted on 
or before May 11, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
---------------------------------------------------------------------------

    \20\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-08388 Filed 4-19-22; 8:45 am]
BILLING CODE 8011-01-P