Federal Register / Vol. 83, No. 249 / Monday, December 31, 2018 / Notices 67759 

6 17 CFR 200.30–3(a)(31). 

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). 

5The month immediately preceding a 

replacement class’s addition to the Pilot Program 

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

the six-month analysis. Thus, a replacement class 

to be added on the second trading day following 

January 1, 2019 would be identified based on The 

Option Clearing Corporation’s trading volume data 

from June 1, 2018 through November 30, 2018. 

6See Securities Exchange Act Release No. 60864 

(October 22, 2009), 74 FR 55876 (October 29, 2009) 

(SR–CBOE–2009–76). 

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

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

9 Id. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–28377 Filed 12–28–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84940; File No. SR–CBOE– 

2018–076] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Relating to the Penny 

Pilot Program 

December 21, 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 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 by the Exchange. The 

Exchange filed the proposal as a ‘‘noncontroversial’’ 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to extend the 

operation of Penny Pilot Program 

through June 30, 2019. The text of the 

proposed rule change is provided 

below. 

(additions are in italics; deletions are 

[bracketed]) 

* * * * * 

Rules of Cboe Exchange, Inc. 

* * * * * 

Rule 6.42. Minimum Increments for Bids and 

Offers 

(a)–(b) No change. 

. . . Interpretations and Policies: 

.01–.03 No change. 

.04 The Exchange may replace any option 

class participating in the Penny Pilot 

Program that has been delisted with the next 

most actively traded, multiply listed option 

class, based on national average daily volume 

in the preceding six calendar months, that is 

not yet included in the Pilot Program. Any 

replacement class would be added on the 

second trading day following [July 1, 

2018]January 1, 2019. The Penny Pilot will 

expire on [December 31, 2018]June 30, 2019. 

* * * * * 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://www.cboe.com/ 

AboutCBOE/CBOELegal

RegulatoryHome.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 Penny Pilot Program (the ‘‘Pilot 

Program’’) is scheduled to expire on 

December 31, 2018. The Exchange 

proposes to extend the Pilot Program 

until June 30, 2019. The Exchange 

believes that extending the Pilot 

Program will allow for further analysis 

of the Pilot Program and a 

determination of how the Pilot Program 

should be structured in the future. 

During this extension of the Pilot 

Program, the Exchange proposes that it 

may replace any option class that is 

currently included in the Pilot Program 

and that has been delisted with the next 

most actively traded, multiply listed 

option class that is not yet participating 

in the Pilot Program (‘‘replacement 

class’’). Any replacement class would be 

determined based on national average 

daily volume in the preceding six 

months,5 and would be added on the 

second trading day following January 1, 

2019. The Exchange will employ the 

same parameters to prospective 

replacement classes as approved and 

applicable in determining the existing 

classes in the Pilot Program, including 

excluding high-priced underlying 

securities.6 The Exchange will 

announce to its Trading Permit Holders 

by circular any replacement classes in 

the Pilot Program. 

The Exchange is specifically 

authorized to act jointly with the other 

options exchanges participating in the 

Pilot Program in identifying any 

replacement class. The Exchange lastly 

represents that the Exchange has the 

necessary system capacity to continue to 

support operation of the Penny Pilot. 

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.7 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 8 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 facilitation 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) 9 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

In particular, the proposed rule change 

allows for an extension of the Pilot 

Program for the benefit of market 

participants. The Exchange notes that 

this proposal does not propose any new 

policies or provisions that are unique or 

unproven, but instead relates to the 

continuation of an existing program that 

operates on a pilot basis. 


khammond on DSK30JT082PROD with NOTICES
67760 Federal Register / Vol. 83, No. 249 / Monday, December 31, 2018 / Notices 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b–4(f)(6). 

12 15 U.S.C. 78s(b)(3)(A). 

13 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. 

14 17 CFR 240.19b–4(f)(6). 

15 17 CFR 240.19b–4(f)(6)(iii). 

16See Securities Exchange Release No. 61061 

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

2009) (SR–NYSEArca–2009–44). 

17For 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). 

18 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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. 

Specifically, the Exchange believes 

that, by extending the expiration of the 

Pilot Program, the proposed rule change 

will allow for further analysis of the 

Pilot Program and a determination of 

how the Program should be structured 

in the future. In doing so, the proposed 

rule change will also serve to promote 

regulatory clarity and consistency, 

thereby reducing burdens on the 

marketplace and facilitating investor 

protection. In addition, the Exchange 

has been authorized to act jointly in 

extending the Pilot Program and 

believes the other exchanges will be 

filing similar extensions. 

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) of the Act 10 and Rule 19b– 

4(f)(6) 11 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 

Act 12 and Rule 19b–4(f)(6) 13

thereunder. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 14 normally does not 

become operative prior to 30 days after 

the date of filing. However, pursuant to 

Rule 19b–4(f)(6)(iii),15 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.16 Accordingly, the 

Commission designates the proposed 

rule change as operative upon filing 

with the Commission.17

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– 

CBOE–2018–076 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–2018–076. 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–CBOE–2018–076 and 

should be submitted on or before 

January 22, 2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–28384 Filed 12–28–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84938; File No. SR–Phlx– 

2018–82] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend General 8 

December 21, 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 

19, 2018, Nasdaq PHLX LLC (‘‘Phlx’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 


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