Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Move the Rules in Chapter XVII, Which Governs Exchange Disciplinary Procedures, of the Current Rulebook to Proposed Chapter 13 of the Shell Rulebook
| Published date | 09 October 2019 |
| Citation | 84 FR 54190 |
| Record Number | 2019-22011 |
| Section | Notices |
| Court | Securities And Exchange Commission |
Federal Register, Volume 84 Issue 196 (Wednesday, October 9, 2019)
[Federal Register Volume 84, Number 196 (Wednesday, October 9, 2019)]
[Notices]
[Pages 54190-54193]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-22011]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87210; File No. SR-CBOE-2019-068]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Move
the Rules in Chapter XVII, Which Governs Exchange Disciplinary
Procedures, of the Current Rulebook to Proposed Chapter 13 of the Shell
Rulebook
October 3, 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 26, 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
[[Page 54191]]
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 move the Rules in Chapter XVII, which governs Exchange disciplinary
procedures, of the currently effective Rulebook (``current Rulebook'')
to proposed Chapter 13 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 current Chapter XVII which
governs Exchange disciplinary procedures, to proposed Chapter 13 in the
shell Rulebook. The Exchange notes that in addition to relocating the
disciplinary rules to proposed shell Chapter 13, the proposed rule
change deletes the rules from the current Rulebook. The proposed rule
change relocates the rules as follows:
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Shell rule Current rule
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13.1 Disciplinary Jurisdiction......... 17.1 Disciplinary Jurisdiction.
13.2 Compliant and Investigation....... 17.2 Compliant and
Investigation.
13.3 Expedited Proceeding.............. 17.3 Expedited Proceeding.
13.4 Charges........................... 17.4 Charges.
13.5 Answer............................ 17.5 Answer.
13.6 Hearing........................... 17.6 Hearing.
13.7 Summary Proceedings............... 17.7 Summary Proceedings.
13.8 Offers of Settlement.............. 17.8 Offers of Settlement.
13.9 Decision.......................... 17.9 Decision.
13.10 Review........................... 17.10 Review.
13.11 Judgment and Sanction............ 17.11 Judgment and Sanction.
13.12 Service of Notice................ 17.12 Service of Notice
13.13 Extension of Time Limits......... 17.13 Extension of Time Limits.
13.14 Reporting to Central Registration 17.14 Reporting to Central
Depository. Registration Depository.
13.15 Imposition of Fines for Minor 17.50 Imposition of Fines for
Rule Violations. Minor Rule Violations.
13.16 Ex Parte Communications.......... 17.15 Ex Parte Communications.
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The proposed changes are of a non-substantive nature and will not
amend the relocated rules other than to update their numbers, conform
paragraph structure and number/lettering format to that of the shell
Rulebook, and make cross-reference changes to shell rules.
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
[[Page 54192]]
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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As stated, the proposed rule change makes no substantive changes to
the rules. The proposed rule change is merely intended to relocate the
Exchange's rules to the shell Rulebook and update their numbers,
paragraph structure, including number and lettering format, and cross-
references to conform to the shell Rulebook as a whole in anticipation
of the technology migration on October 7, 2019. As such, the proposed
rule change is designed to promote just and equitable principles of
trade, 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, by improving the way the Exchange's
Rulebook is organized, making it easier to read, and, particularly,
helping market participants better understand the rules of the
Exchange, 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 not necessary or appropriate in
furtherance of the purposes of the Act. The proposed rule change is not
intended as a competitive change, but rather, seeks to make non-
substantive rule changes in relocating the rules and updating cross-
references to shell rules in anticipation of the October 7, 2019
technology migration. The Exchange also does not believe that the
proposed rule change will impose any undue burden on competition
because the relocated rule text is exactly 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)(iii) of the Act \8\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\9\
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\8\ 15 U.S.C. 78s(b)(3)(A)(iii).
\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.
Because this proposal does not make any substantive changes to the
rules but only moves them into the shell Rulebook, the Commission
designates a shorter time under Rule 19b-4(f)(6)(iii) by waiving the
five business prefiling period for this proposal.
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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 five day prefiling requirement
and the 30-day operative delay so that it may implement the proposed
rule change in connection with the technology migration on October 7,
2019. According to the Exchange, waiver of the prefiling requirement
and the operative delay will help to avoid any potential confusion by
providing investors with a complete Exchange Rulebook upon the
completion of migration. The Commission believes that waiver of the 30-
day operative delay is consistent with the protection of investors and
the public interest because the proposed rule change raises no new or
novel issues as it does not substantively amend the relocated rules.
Therefore, the Commission hereby waives the prefiling requirement and
the 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 five day prefiling
requirement and the 30-day operative delay, the Commission has also
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 will 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-2019-068 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-2019-068. 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-2019-068 and should be submitted on
or before October 30, 2019.
[[Page 54193]]
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. 2019-22011 Filed 10-8-19; 8:45 am]
BILLING CODE 8011-01-P
