Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices 843 

7 15 U.S.C. 78s(b)(3)(A)(ii). 

8 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3References herein to Chapter and Series refer to 

rules of the NASDAQ Options Market (‘‘NOM’’), 

unless otherwise noted. 

charges for ports, it does not describe 

the nuances of the Exchange’s existing 

practices for assessing port fees in 

different situations. The proposal will 

convey these nuances in order to avoid 

potential confusion among customers as 

to the circumstances in which they will 

incur port fees. In particular, the 

proposal will amend Section 115 to 

state that, for certain enumerated port 

types, the Exchange will assess a 

monthly fee only on the MPID that 

requested the port, whereas in other 

enumerated port types, the Exchange 

will assess a separate fee to the 

requesting MPID as well as to each 

additional MPID that the requester 

asked the Exchange to assign to the 

same port. 

The Exchange believes that this 

proposal is also equitable in that a more 

fulsome description of the Exchange’s 

port fee practices will help to avoid any 

potential confusion as to when and 

under what circumstances the Exchange 

will assess a monthly port fee to a 

customer. The Exchange notes that the 

proposal merely codifies the existing 

practices of the Exchange with respect 

to port fees and will not involve any 

substantive changes to the fees that the 

Exchange’s customers are paying now. 

Finally, the Exchange believes that its 

proposal is not unfairly discriminatory 

because, again, the proposal will merely 

make non-substantive clarifications to 

Section 115 that will codify the 

Exchange’s existing practices for 

assessing port fees in different 

situations. The proposal will not make 

any changes to the fees that port users 

pay presently. 

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. Insofar as the 

proposal merely codifies existing 

practice and makes no changes to the 

fees that the Exchange charges 

presently, the Exchange does not expect 

that the proposal will have any impact 

on competition whatsoever. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act.7

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: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) 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 

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 rule-comments@

sec.gov. Please include File Number SR– 

BX–2018–066 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–BX–2018–066. 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–BX–2018–066, and should 

be submitted on or before February 21, 

2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2019–00475 Filed 1–30–19; 8:45 am] 

BILLING CODE P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84960; File No. SR– 

NASDAQ–2018–107] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend 

Chapter VI, Section 5 of the Rules of 

The Nasdaq Options Market 

December 26, 2018. 

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 December 

21, 2018, The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’ or ‘‘Exchange’’) 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Chapter VI, Section 5 (Minimum 

Increments) 3 of the rules of The Nasdaq 

Options Market (‘‘NOM’’) to extend 

through June 30, 2019 or the date of 


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844 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices 

4The options exchanges in the U.S. that have 

pilot programs similar to the Penny Pilot (together 

‘‘pilot programs’’) are currently working on a 

proposal for permanent approval of the respective 

pilot programs. 

5See Securities Exchange Act Release No. 83527 

(June 26, 2018), 83 FR 31004 (July 2, 2018) (SR– 

NASDAQ–2018–048). 

6The replacement issues will be announced to 

the Exchange’s membership via an Options Trader 

Alert (OTA) posted on the Exchange’s website. 

Penny Pilot replacement issues will be selected 

based on trading activity in the previous six 

months, as is the case today. The replacement 

issues would be identified based on The Options 

Clearing Corporation’s trading volume data. For 

example, for the January replacement, trading 

volume from June 1, 2018 through November 30, 

2018 would be analyzed. The month immediately 

preceding the replacement issues’ addition to the 

Pilot (i.e., December) would not be used for 

purposes of the six-month analysis. 

7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(5). 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f)(6). 

permanent approval, if earlier, the 

Penny Pilot Program in options classes 

in certain issues (‘‘Penny Pilot’’ or 

‘‘Pilot’’), and to change the date when 

delisted classes may be replaced in the 

Penny Pilot. 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://nasdaq.cchwallstreet.com, at the 

principal office of the Exchange, 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 purpose of this filing is to amend 

Chapter VI, Section 5, to extend the 

Penny Pilot through June 30, 2019 or the 

date of permanent approval, if earlier,4

and to change the date when delisted 

classes may be replaced in the Penny 

Pilot. The Exchange believes that 

extending the Penny Pilot will allow for 

further analysis of the Penny Pilot and 

a determination of how the program 

should be structured in the future. 

Under the Penny Pilot, the minimum 

price variation for all participating 

options classes, except for the Nasdaq– 

100 Index Tracking Stock (‘‘QQQQ’’), 

the SPDR S&P 500 Exchange Traded 

Fund (‘‘SPY’’) and the iShares Russell 

2000 Index Fund (‘‘IWM’’), is $0.01 for 

all quotations in options series that are 

quoted at less than $3 per contract and 

$0.05 for all quotations in options series 

that are quoted at $3 per contract or 

greater. QQQQ, SPY and IWM are 

quoted in $0.01 increments for all 

options series. The Penny Pilot is 

currently scheduled to expire on 

December 31, 2018.5

The Exchange proposes to extend the 

time period of the Penny Pilot through 

June 30, 2019 or the date of permanent 

approval, if earlier, and to provide a 

revised date for adding replacement 

issues to the Penny Pilot. The Exchange 

proposes that any Penny Pilot Program 

issues that have been delisted may be 

replaced on the second trading day 

following January 1, 2019. The 

replacement issues will be selected 

based on trading activity in the previous 

six months.6

This filing does not propose any 

substantive changes to the Penny Pilot 

Program; all classes currently 

participating in the Penny Pilot will 

remain the same and all minimum 

increments will remain unchanged. The 

Exchange believes the benefits to public 

customers and other market participants 

who will be able to express their true 

prices to buy and sell options have been 

demonstrated to outweigh the potential 

increase in quote traffic. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,7 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,8

in particular, in that it is 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 facilitating 

transactions in securities, and 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. 

In particular, the proposed rule 

change, which extends the Penny Pilot 

for an additional six months through 

June 30, 2019 or the date of permanent 

approval, if earlier, and changes the date 

for replacing Penny Pilot issues that 

were delisted to the second trading day 

following January 1, 2019, will enable 

public customers and other market 

participants to express their true prices 

to buy and sell options for the benefit 

of all market participants. This is 

consistent with the Act. 

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. To the 

contrary, this proposal is procompetitive because it allows Penny 

Pilot issues to continue trading on the 

Exchange. 

Moreover, the Exchange believes that 

the proposed rule change will allow for 

further analysis of the Pilot and a 

determination of how the Pilot should 

be structured in the future; and will 

serve to promote regulatory clarity and 

consistency, thereby reducing burdens 

on the marketplace and facilitating 

investor protection. 

The Pilot is an industry-wide 

initiative supported by all other option 

exchanges. The Exchange believes that 

extending the Pilot will allow for 

continued competition between market 

participants on the Exchange trading 

similar products as their counterparts 

on other exchanges, while at the same 

time allowing the Exchange to continue 

to compete for order flow with other 

exchanges in option issues trading as 

part of the Pilot. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

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) of the Act 9 and Rule 19b– 

4(f)(6) 10 thereunder. 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 after the date of 

the filing, 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 19(b)(3)(A) of the 


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Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices 845 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

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. 

13 17 CFR 240.19b–4(f)(6). 

14 17 CFR 240.19b–4(f)(6)(iii). 

15See Securities Exchange Release No. 61061 

(November 24, 2009), 74 FR 62857 (December 1, 

2009) (SR–NYSEArca–2009–44). 

16For purposes only of waiving the operative 

delay for this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 17 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A). 

4 17 CFR 240.19b–4(f)(6)(iii). 

5The rules of BZX Options, including rules 

applicable to BZX Options’ participation in the 

Penny Pilot, were approved on January 26, 2010. 

See Securities Exchange Act Release No. 61419 

(January 26, 2010), 75 FR 5157 (February 1, 2010) 

(SR–BATS–2009–031). BZX Options commenced 

operations on February 26, 2010. 

Act 11 and Rule 19b–4(f)(6) 12

thereunder. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 13 normally does not 

become operative prior to 30 days after 

the date of filing. However, pursuant to 

Rule 19b–4(f)(6)(iii),14 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 proposal may become operative 

immediately upon filing. The 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest because doing so will 

allow the Pilot Program to continue 

without interruption in a manner that is 

consistent with the Commission’s prior 

approval of the extension and expansion 

of the Pilot Program.15 Accordingly, the 

Commission designates the proposed 

rule change as operative upon filing 

with the Commission.16

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 

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 rule-comments@

sec.gov. Please include File Number SR– 

NASDAQ–2018–107 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–NASDAQ–2018–107. 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 20549–1090 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–NASDAQ–2018–107 and 

should be submitted on or before 

February 21, 2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2019–00472 Filed 1–30–19; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84953; File No. SR– 

CboeBZX–2018–093] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change to Rule 21.5, 

Minimum Increments, To Extend the 

Penny Pilot Program 

December 26, 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 December 

20, 2018, Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Exchange has 

designated this proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A) of the 

Act 3 and Rule 19b–4(f)(6)(iii) 

thereunder,4 which renders it effective 

upon filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange filed a proposal to for 

the BZX Options Market (‘‘BZX 

Options’’) to extend through June 30, 

2019, the Penny Pilot Program (‘‘Penny 

Pilot’’) in options classes in certain 

issues (‘‘Pilot Program’’) previously 

approved by the Commission.5

The text of the proposed rule change 

is available at the Exchange’s website at 

www.markets.cboe.com, at the principal 

office of the Exchange, 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 


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