Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Adopt a Shell Structure for the Cboe Options Rulebook in Connection With the Migration of the Exchange to Bats Technology

Federal Register, Volume 83 Issue 238 (Wednesday, December 12, 2018)

Federal Register Volume 83, Number 238 (Wednesday, December 12, 2018)

Notices

Pages 63952-63953

From the Federal Register Online via the Government Publishing Office www.gpo.gov

FR Doc No: 2018-26835

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SECURITIES AND EXCHANGE COMMISSION

Release No. 34-84739; File No. SR-CBOE-2018-074

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Adopt a Shell Structure for the Cboe Options Rulebook in Connection With the Migration of the Exchange to Bats Technology

December 6, 2018.

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 November 26, 2018, 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. 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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1. 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 adopt a shell structure for the Cboe Options rulebook (``Rulebook'') in connection with the migration of the Exchange to Bats technology.

   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.

2. 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.

   1. 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 technology onto the same trading platform as the other Cboe Affiliated Exchanges, which the Exchange expects to complete on October 7, 2019. Cboe Options believes offering similar functionality to the extent practicable will reduce potential confusion for market participants.

         In connection with this technology migration, the Exchange proposes to add a shell structure that would reside alongside its current Rulebook. The proposed shell outlines the various chapters, and sections within certain chapters, of the future Rulebook, as well as contains new chapter numbering. In subsequent rule changes, Cboe Options will amend its Rules to reflect proposed changes to its system in connection with the system migration. Cboe Options will also submit subsequent rule changes to move rule text that will not change as part of the technology migration from the current Rulebook to the future Rulebook.

      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. The Exchange believes the proposed rule change will remove impediments to

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         a free and open market, as it will start the process of updating and reorganizing the Exchange's Rulebook in connection with the migration of its system to Bats technology. This will ensure Trading Permit Holders can easily identify the Rules that will be in place upon implementation of the technology migration, which benefits investors. The proposed rule change makes no substantive changes to the current Rulebook.

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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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   2. Self-Regulatory Organization's Statement on Burden on Competition

      Cboe Options 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 proposed rule change makes nonsubstantive changes and has no impact on trading on the Exchange, as they are intended to start the process of updating and reorganizing the Exchange's Rulebook in connection with the migration of its system to Bats technology.

   3. 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.

3. 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 \8\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\9\ 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.

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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 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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4. 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-2018-074 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-2018-074. 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-2018-074 and should be submitted on or before January 2, 2019.

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   \10\ 17 CFR 200.30-3(a)(12).

   For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\10\

   Eduardo A. Aleman,

   Assistant Secretary.

   FR Doc. 2018-26835 Filed 12-11-18; 8:45 am

   BILLING CODE 8011-01-P