67388 Federal Register / Vol. 88, No. 188 / Friday, September 29, 2023 / Notices 

19See supra note 5. 

20 15 U.S.C. 78s(b)(3)(A)(iii). 

21 17 CFR 240.19b–4(f)(6). 

22 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. The Exchange 

has satisfied this requirement. 

23 17 CFR 240.19b–4(f)(6). 

24 17 CFR 240.19b–4(f)(6)(iii). 

25For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule change’s impact on efficiency, 

competition, and capital formation. See 15 U.S.C. 

78c(f). 

26 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)(iii). 

Maintaining Qualifications Program in 

the same manner.19

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

MIAX has filed the proposed rule 

change pursuant to Section 19(b)(3)(A) 

of the Act 20 and Rule 19b–4(f)(6) 

thereunder.21 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, it has become effective 

pursuant to 19(b)(3)(A) of the Act and 

Rule 19b–4(f)(6)(iii) thereunder.22

A proposed rule change filed under 

Rule 19b–4(f)(6) 23 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b4(f)(6)(iii),24 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. MIAX has 

indicated that the immediate operation 

of the proposed rule change is 

appropriate because it would allow the 

Exchange to implement the proposed 

changes to its continuing education 

rules without delay, thereby eliminating 

the possibility of a significant regulatory 

gap between the FINRA rules and the 

Exchange rules, providing more uniform 

standards across the securities industry, 

and helping to avoid confusion for 

Exchange members that are also FINRA 

members. MIAX also noted that FINRA 

plans to conduct additional public 

outreach efforts to promote awareness of 

the MQP and the availability of the 

Second Enrollment Period among LookBack Individuals. Therefore, MIAX 

indicated that the immediate operation 

of the proposed rule change is also 

appropriate because it would help to 

further notify Look-Back Individuals of 

their options and provide additional 

time for them to consider whether they 

wish to participate in the MQP before 

the December 31, 2023 deadline. For 

these reasons, the Commission believes 

that waiver of the 30-day operative 

delay for this proposal is consistent 

with the protection of investors and the 

public interest. Accordingly, the 

Commission hereby waives the 30-day 

operative delay and designates the 

proposal operative upon filing.25

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 (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

MIAX–2023–34 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–MIAX–2023–34. 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 (https://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 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–MIAX–2023–34 and should be 

submitted on or before October 20, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–21351 Filed 9–28–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98509; File No. SR–CBOE– 

2023–052] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Certain Rules 

Related to Stock-Option Orders 

September 25, 2023. 

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 

September 15, 2023, Cboe Exchange, 

Inc. (‘‘Exchange’’ or ‘‘Cboe Options’’) 

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 filed the proposal pursuant to 

Section 19(b)(3)(A)(iii) of the Act 3 and 


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4 17 CFR 240.19b–4(f)(6). 

5Only those stock-option orders in the classes 

designated by the Exchange with no more than the 

applicable number of legs are eligible for 

processing. Stock-option orders execute in the same 

manner as other complex orders, except as 

otherwise specified in Rule 5.33. 

6Rule 5.33(f)(2)(A) states the System does not 

execute a complex order pursuant to Rule 5.33 at 

a net price: (i) that would cause any component of 

the complex strategy to be executed at a price of 

zero; (ii) that would cause any component of the 

complex strategy to be executed at a price worse 

than the individual component prices on the 

Simple Book; (iii) worse than the price that would 

be available if the complex order Legged into the 

Simple Book; or (iv) worse than the SBBO or equal 

to the SBBO when there is a Priority Customer 

order on any leg comprising the SBBO and: (a) if 

a complex order has a ratio equal to or greater than 

one-to-three (.333) and less than or equal to threeto-one (3.00), or is an Index Combo order, at least 

one component of the complex order must execute 

at a price that improves the BBO for that component 

by at least one minimum increment; or (b) if the 

complex order has a ratio less than one-to-three 

(.333) or greater than three-to-one (3.00), the 

component(s) of the complex order for the leg(s) 

with a Priority Customer order at the BBO must 

execute at a price that improves the price of that 

Priority Customer order(s) on the Simple Book by 

at least one minimum increment, except AON 

complex orders may only execute at prices better 

than the SBBO. 

7To facilitate the execution of the stock leg and 

options leg(s) of an executable stock-option order at 

valid increments pursuant to Rule 5.33(f)(1)(B), the 

legs may trade outside of their expected notional 

trade value by a specified amount (which the 

Exchange determines), unless the order has a 

capacity of ‘‘C’’. 

8See Rule 5.33(f)(2)(B)(i)–(iii). The rule further 

provides that the execution price of the buy (sell) 

stock leg of a QCC with Stock Order may be any 

price (including outside the NBBO for the stock 

leg), except the price must be permitted by 

Regulation SHO and the Limit Up-Limit Down Plan. 

Rule 5.33(f)(2)(B)(iv). 

9See Securities Exchange Release No. 94204 

(February 9, 2022), 87 FR 8625 (February 15, 2022) 

(SR–CBOE–2021–046). 

10The proposed definition of conforming 

complex order provides that, for the purpose of 

applying these ratios to complex orders comprised 

of legs for both mini-options and standard options, 

ten mini-option contracts represent one standard 

option contract. 

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 

Cboe Exchange, Inc. (the ‘‘Exchange’’ 

or ‘‘Cboe Options’’) proposes to amend 

certain Rules related to stock-option 

orders. 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 

The Exchange proposes to update 

certain of its Rules regarding the 

definition and execution of stock-option 

orders. Rule 1.1 defines a ‘‘stock-option 

order’’ as an order to buy or sell a stated 

number of units of an underlying or a 

related security coupled with either (a) 

the purchase or sale of option 

contract(s) on the opposite side of the 

market representing either the same 

number of units of the underlying or 

related security or the number of units 

of the underlying security necessary to 

create a delta neutral position or (b) the 

purchase or sale of an equal number of 

put and call option contracts, each 

having the same exercise price and 

expiration date, and each representing 

the same number of units of stock as, 

and on the opposite side of the market 

from, the underlying or related security 

portion of the order. It also provides that 

for purposes of electronic trading, the 

term stock-option order has the meaning 

set forth in Rule 5.33. Therefore, this 

definition of stock-option order in Rule 

1.1 applies to open outcry trading on the 

Exchange. 

Rule 5.33(b)(5) currently defines a 

‘‘stock-option order’’ for purposes of 

electronic trading as the purchase or 

sale of a stated number of units of an 

underlying stock or a security 

convertible into the underlying stock 

(‘‘convertible security’’) coupled with 

the purchase or sale of an option 

contract(s) on the opposite side of the 

market representing either (a) the same 

number of units of the underlying stock 

or convertible security or (b) the number 

of units of the underlying stock 

necessary to create a delta neutral 

position, but in no case in a ratio greater 

than eight-to-one (8.00), where the ratio 

represents the total number of units of 

the underlying stock or convertible 

security in the option leg(s) to the total 

number of units of the underlying stock 

or convertible security in the stock leg.5

Rule 5.33(f)(2)(B) and Rule 5.85(b)(3) 

currently describe certain restrictions on 

electronic and open outcry, 

respectively, executions of stock-option 

orders. Current Rule 5.33(f)(2)(B) 

provides that stock-option orders that 

execute electronically are subject to the 

following: 

• For a stock-option order with one 

option leg, the option leg may not trade 

at a price worse than the individual 

component price on the Simple Book or 

at the same price as a Priority Customer 

Order on the Simple Book. 

• For a stock-option order with more 

than one option leg, the option legs 

must trade at prices pursuant Rule 

5.33(f)(2)(A).6

• A stock-option order may only 

execute if the stock leg is executable at 

the price(s) necessary to achieve the 

desired net price.7

• The System executes the buy (sell) 

stock leg of a stock-option order 

pursuant to Rule 5.33 up to a buffer 

amount above (below) the NBO (NBB) 

for the stock leg.8

Rule 5.85(b)(3) provides that stockoption orders and security future-option 

orders have priority over bids (offers) of 

in-crowd market participants but not 

over Priority Customer bids (offers) in 

the Book. 

The Exchange previously amended its 

rules to permit complex orders of all 

ratios to be executed on the Exchange, 

both electronically and in open outcry, 

subject to certain execution 

restrictions.9 Rule 1.1 currently defines 

‘‘complex order’’ as an order involving 

the concurrent execution of two or more 

different series in the same underlying 

security or index (the ‘‘legs’’ or 

‘‘components’’ of the complex order), 

for the same account, occurring at or 

near the same time and for the purpose 

of executing a particular investment 

strategy with no more than the 

applicable number of legs (which 

number the Exchange determines on a 

class-by-class basis). The Exchange 

determines in which classes complex 

orders are eligible for processing. The 

Exchange determines on a class-by-class 

basis whether complex orders with 

ratios less than one-to-three (.333) or 

greater than three-to-one (3.00) (except 

for Index Combo orders) are eligible for 

electronic processing. Unless the 

context otherwise requires, the term 

complex order includes Index Combo 

orders, stock-option orders and security 

future-option orders.10


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11See Miami International Securities Exchange, 

LLC (‘‘MIAX’’) Rule 518(a)(8) and (16) (defining 

‘‘conforming ratio’’ and ‘‘nonconforming ratio’’). 

12See Rule 5.33(b)(5) (definition of Index Combo 

order). 

13See id. (defining an ‘‘Index Combo’’ order is an 

order to purchase or sell one or more index option 

series and the offsetting number of Index 

Combinations defined by the delta. For purposes of 

an Index Combo order, the following terms have the 

following meanings: (1) An ‘‘Index Combination’’ is 

a purchase (sale) of an index option call and sale 

(purchase) of an index option put with the same 

underlying index, expiration date, and strike price. 

(2) A ‘‘delta’’ is the positive (negative) number of 

Index Combinations that must be sold (purchased) 

to establish a market neutral hedge with one or 

more series of the same index option. (3) An Index 

Combo order may not have a ratio greater than eight 

options to one Index Combination (8.00), and will 

be subject to all provisions applicable to complex 

orders (excluding the one-to-three/three-to-one 

ratio) in the Rules.) 

14See Securities Exchange Act Release No. 87883 

(January 2, 2020), 85 FR 942 (January 8, 2020) (SR– 

CBOE–2019–126). 

15See id. at 945. 

16See id. At the time the Index Combo order type 

was adopted, Rule 5.33(f)(2)(A) included 

permissible pricing for conforming complex orders 

only, which as a result would have applied to Index 

Combos. 

17See id. and Rule 5.33(b)(5) (subparagraph (3) of 

definition of Index Combo). 

18See supra note 9; and Exchange Notice, Cboe 

Options Introduces New Net Price Increments and 

Enhanced Electronic and Open Outcry Handling for 

Complex Orders with Non-Conforming Ratios, 

dated March 21, 2022 (available at Cboe Options 

Introduces New Net Price Increments and Enhanced 

Electronic and Open Outcry Handling for Complex 

Orders with Non-Conforming Ratios). The Exchange 

notes another options exchange interprets current 

Rule 5.33 to permit the electronic processing of 

nonconforming stock-option orders. 19See Rule 5.33(f)(2)(A)(iv). 

The Exchange first proposes to adopt 

definitions of ‘‘conforming’’ and 

‘‘nonconforming’’ complex orders in 

Rule 1.1. The Exchange notes these 

proposed definitions are consistent with 

definitions used by another options 

exchange.11 Specifically, the Exchange 

proposes to define a ‘‘conforming 

complex order’’ as (a) a complex order 

with a ratio on the options legs greater 

than or equal to one-to-three (.333) or 

less than or equal to three-to-one (3.00), 

(b) an Index Combo order,12 and (c) a 

stock-option order with a ratio less than 

or equal to eight-to-one (8.00), where the 

ratio represents the total number of 

units of the underlying stock or 

convertible security in the option leg(s) 

to the total number of units of the 

underlying stock or convertible security 

in the stock leg. The Exchange proposes 

to define a ‘‘nonconforming complex 

order’’ as (a) a complex order with a 

ratio on the options legs less than oneto-three (.333) or greater than three-toone (3.00) (except for Index Combo 

orders) and (b) a stock-option order with 

a ratio greater than eight-to-one (8.00), 

where the ratio represents the total 

number of units of the underlying stock 

or convertible security in the option 

leg(s) to the total number of units of the 

underlying stock or convertible security 

in the stock leg. The proposed 

definitions of conforming and 

nonconforming complex orders each 

provide that, for the purpose of applying 

these ratios to complex orders 

comprised of legs for both mini-options 

and standard options, ten mini-option 

contracts represent one standard option 

contract. The proposed definitions of 

conforming and nonconforming 

complex orders also provide that, for or 

the purpose of applying these ratios to 

complex orders comprised of legs for 

both micro-options and standard 

options, 100 micro-option contracts 

represent one standard option contract. 

These proposed ratio applications are 

consistent with the current definition of 

complex order and stock-option order. 

The inclusion of an Index Combo as 

a conforming complex order is 

consistent with the definition of Index 

Combo order 13 and the rule filing to 

adopt an Index Combo order.14 As noted 

in the rule filing to adopt an Index 

Combo order, the release further stated 

that the proposed eight-to-one ratio was 

selected because it was a ‘‘defined 

conforming ratio . . . used for stockoption orders . . . .’’ 15 The purpose of 

an Index Combo order is to allow 

investors to trade an index option with 

a synthetic underlying position, making 

it a functional equivalent to a stockoption order.16 As noted in that rule 

filing, and in the definition of an Index 

Combo order in Rule 5.33, an Index 

Combo order is subject to all provisions 

applicable to complex orders (excluding 

the one-to-three/three-to-one ratio) in 

the Rules, which included permissible 

execution prices set forth in Rule 

5.33(f)(2)(A).17 Therefore, it is 

consistent with current Rules to include 

an Index Combo order as a ‘‘conforming 

complex order.’’ 

The proposed rule change amends 

Rules 1.1 (definitions of ‘‘complex 

order’’ and ‘‘stock-option order’’); 5.6(c) 

(definition of ‘‘complex order’’); 

5.30(a)(4), (b)(4), and (c)(4); 5.33(a) 

(definition of ‘‘complex order’’), (b)(5) 

(definition of ‘‘stock-option order’’), and 

(f)(A)(iv); 5.83(b); and 5.85(b)(1) and (2) 

to incorporate the proposed definitions 

of conforming and nonconforming 

complex orders but make no other 

substantive changes to these rules. 

These proposed changes are consistent 

with industry terminology regarding 

complex orders with these ratios. 

Based on the definition in Rule 1.1 of 

complex orders, which includes stockoption orders, the Exchange’s previous 

rule change was intended to apply to 

stock-option orders (i.e., to permit stockoption orders of any ratio to be 

processed, including (in permitted 

classes) electronically.18 The reasons set 

forth in that rule change for expanding 

electronic processing of nonconforming 

complex orders applies to all complex 

orders, including stock-option orders. 

However, the Exchange inadvertently 

did not update certain provisions 

specific to stock-option orders. 

Therefore, in addition to adding the 

proposed definitions of conforming and 

nonconforming complex orders, the 

proposed rule change clarifies that the 

Exchange may permit stock-option 

orders of any ratio to be processed, 

including (in permitted classes) 

electronically. Specifically, the 

Exchange proposes to update the 

definition of stock-option order in Rule 

5.33(b)(5) to state in classes determined 

by the Exchange, a nonconforming 

stock-option order is not eligible for 

electronic processing, including the 

complex order auction (‘‘COA’’), 

complex order book (‘‘COB’’), complex 

automated improvement mechanism 

(‘‘C–AIM’’), and complex solicited 

auction mechanism (‘‘C–SAM’’). This 

proposed language is the same as 

language currently included in the 

definition of ‘‘complex order’’ in Rule 

5.33(a), the intent of which is to permit 

the Exchange to determine in which 

classes nonconforming complex orders 

(including stock-option orders) may be 

submitted for electronic processing on 

the Exchange pursuant to Rule 5.33. 

The proposed rule change also adds 

Rule 5.33(f)(2)(B)(v) to state the System 

does not execute a stock-option order 

pursuant to Rule 5.33 at a net price 

worse than the SBBO or equal to the 

synthetic best bid or offer (‘‘SBBO’’) 

when there is a Priority Customer order 

on any leg comprising the SBBO and: (a) 

if a conforming stock-option order, at 

least one option component of the stockoption order must execute at a price that 

improves the BBO for that component 

by at least one minimum increment; or 

(b) if a nonconforming stock-option 

order, the option components of the 

stock-option order for the leg(s) with a 

Priority Customer order at the BBO must 

execute at a price that improves the 

price of that Priority Customer order(s) 

on the Simple Book by at least one 

minimum increment, except AON stockoption orders may only execute at prices 

better than the SBBO. This is consistent 

with the permissible execution prices of 

conforming and nonconforming 

complex orders with only option 

components submitted for electronic 

processing.19 Similarly, the proposed 


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20See Rule 5.85(b)(1) and (2). 

21To avoid potential confusion, the proposed rule 

change deletes from Rule 5.85(b)(3) that stockoption orders do not have priority over Priority 

Customer bids (offers) in the simple book, as 

proposed subparagraphs (4) and (5) more explicitly 

describe stock-option order priority with respect to 

bids and offers in the simple book. 

22See Rule 5.33, Interpretation and Policy .04. 

23 15 U.S.C. 78f(b). 

24 15 U.S.C. 78f(b)(5). 

25 Id. 

26See Securities Exchange Act Release No. 87883 

(January 2, 2020), 85 FR 942, 945 (January 8, 2020) 

(SR–CBOE–2019–126); and Rule 5.33(b)(5) 

(definition of Index Combo). 27See MIAX Rule 518(a)(8) and (16) (defining 

‘‘conforming ratio’’ and ‘‘nonconforming ratio’’). 28The current definition of stock-option order in 

Rule 1.1 applicable to open outcry trading has no 

ratio restriction. Therefore, current Rules do not 

currently restrict submission of stock-option orders 

for open outcry trading to conforming stock-option 

orders (as discussed, the Exchange proposes to add 

clarity regarding permissible open outcry execution 

prices of nonconforming stock-option orders, which 

are consistent with those of other nonconforming 

complex orders). 

29See supra note 9. 

rule change adds Rule 5.85(b)(4) and (5) 

to state: 

• A conforming stock-option order 

may be executed at a net debit or credit 

price without giving priority to 

equivalent bids (offers) in the individual 

series legs that are represented in the 

trading crowd or in the Book if the price 

of at least one option leg of the order 

improves the corresponding bid (offer) 

of a Priority Customer order(s) in the 

Book by at least one minimum trading 

increment as set forth in Rule 5.4(b). In 

other words, if there is a Priority 

Customer order on every leg comprising 

the SBBO, at least one option leg of the 

stock-option order must execute at a 

price that improves the price of the 

Priority Customer order on the Simple 

Book for that leg by at least one 

minimum increment. 

• A nonconforming stock-option 

order may be executed at a net debit or 

credit price without giving priority to 

equivalent bids (offers) in the individual 

series legs that are represented in the 

trading crowd or in the Book if each 

option leg of the order betters the 

corresponding bid (offer) of a Priority 

Customer order(s) in the Book on each 

leg by at least one minimum trading 

increment as set forth in Rule 5.4(b). In 

other words, if there is a Priority 

Customer order on any leg(s) comprising 

the SBBO, the component(s) of the 

stock-option for the option leg(s) with a 

Priority Customer order at the BBO must 

execute at a price that improves the 

price of that Priority Customer order(s) 

on the Simple Book by at least one 

minimum increment. 

This is consistent with the 

permissible execution prices of 

conforming and nonconforming 

complex orders with only option 

components submitted for open outcry 

processing.20

Therefore, execution of all conforming 

and nonconforming complex orders, 

including stock-option orders, continues 

to protect Priority Customer interest on 

the Exchange.21

The proposed rule change has no 

impact on the requirements for stockoption orders or how they may be 

executed. For example, all stock-option 

orders (both conforming and 

nonconforming) must satisfy the criteria 

set forth in the definitions of stockoption orders in Rule 1.1 (for open 

outcry processing) and 5.33(b) (for 

electronic processing), as set forth 

above. Additionally, all stock-option 

orders must comply with the Qualified 

Contingent Trade (‘‘QCT’’) exemption.22

The Exchange represents that its 

surveillances incorporate stock-option 

orders with all ratios, including 

nonconforming ratios. 

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.23 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 24 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) 25 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

In particular, the Exchange believes 

the proposed rule change to adopt 

definitions of conforming and 

nonconforming complex orders 

(including stock-option orders) in Rule 

1.1, and to incorporate these proposed 

definitions into Rules 1.1 (definitions of 

‘‘complex order’’ and ‘‘stock-option 

order’’), 5.6(c) (definition of ‘‘complex 

order’’); 5.30(a)(4), (b)(4), and (c)(4), 

5.33(a) (definition of ‘‘complex order’’), 

(b)(5) (definition of ‘‘stock-option 

order’’), and (f)(A)(iv), 5.83(b), and 

5.85(b)(1) and (2), will protect investors, 

as it incorporates into the Exchange’s 

Rules terminology generally used in the 

industry to refer to complex orders with 

ratios equal to and greater than 0.33, 

including Index Combos (conforming) 

and less than 0.33 [sic] and greater than 

3.00 (nonconforming), and stock-option 

orders with ratios less than or equal to 

8.00 (conforming) and greater than 8.00 

(nonconforming). As discussed above, 

inclusion of Index Combos within the 

definition of a conforming complex 

order is consistent with the definition of 

Index Combos and the rule filing to 

adopt Index Combos.26 Therefore, the 

Exchange believes this proposed rule 

change adds transparency and reduces 

potential confusion within the 

Exchange’s Rules. These definitions 

ultimately make no substantive changes 

to the rules and relate merely to 

terminology. The Exchange notes these 

definitions are substantially similar to 

definitions used in at least one other 

options exchanges’ [sic] rulebook.27

Additionally, the Exchange believes 

the proposed rule change to provide for 

the electronic processing of stock-option 

orders with any ratio will remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to [sic] protect investors and the 

public interest, as it will eliminate 

confusion regarding what types of stockoption orders are permissible for 

electronic processing. As noted above, 

when the Exchange amended its Rules 

to permit the electronic processing of 

nonconforming complex orders, the 

intent of that amended was to permit 

the electronic processing of all 

nonconforming complex orders, 

including nonconforming stock-option 

orders.28 The reasons set forth in the 

Exchange’s prior rule filing regarding 

expansion of electronic processing of 

nonconforming complex orders applies 

to all complex orders, including stockoption orders; the Exchange 

inadvertently omitted updates to certain 

provision regarding stock-option orders 

to incorporate that change.29 The 

proposed rule change merely updates 

the definition of stock-option order to 

incorporate the same change that was 

made to the definition of complex order 

with respect to electronic processing to 

provide consistency and transparency in 

the Exchange’s Rules. As noted above, 

the proposed rule changes regarding 

execution of conforming and 

nonconforming stock-option orders are 

consistent with the Exchange’s 

previously adopted rules regarding 


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67392 Federal Register / Vol. 88, No. 188 / Friday, September 29, 2023 / Notices 

30See MIAX Rule 518, Interpretation and Policy 

.01(c). 

31See Rule 5.33, Interpretation and Policy .04. 

32See MIAX Rules 518(a)(5), (8), and (16) and 

Interpretation and Policy .01(c). 33See id. 

34 15 U.S.C. 78s(b)(3)(A). 

35 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. The Exchange 

has satisfied this requirement. 

36 17 CFR 240.19b–4(f)(6). 

37 17 CFR 240.19b–4(f)(6)(iii). 

38See MIAX Rule 518(a)(5). 

39See MIAX Rules 518(a)(8) and (a)(16) (defining 

‘‘conforming ratio’’ and ‘‘non-conforming ratio,’’ 

respectively). 

execution of other conforming and 

nonconforming complex orders. This 

proposed change is also consistent with 

the rules of at least one other options 

exchange.30

The proposed rule change also adds 

provisions in Rules 5.33(f)(2)(B) and 

5.85(b) (and deletes the current 

provision in Rule 5.85(b)(3) describing 

stock-option order priority with respect 

to Priority Customer bids (offers) in the 

Book) regarding the specific permissible 

execution prices for conforming and 

nonconforming stock-option orders, 

consistent with the execution pricing for 

other conforming and nonconforming 

complex orders, which further adds 

transparency regarding the execution of 

these orders on the Exchange (both 

electronically and in open outcry). The 

Exchange believes the proposed rule 

change will add clarity, transparency, 

and consistency to its Rules, thus 

eliminating potential confusion about 

the permissible execution prices of 

conforming and nonconforming 

complex orders, which will ultimately 

remove impediments to and perfect the 

mechanisms of a free and open market 

and national market system, and in 

general protect investors. 

The proposed rule change will permit 

the electronic trading of nonconforming 

stock-option orders but has no impact 

on the requirements for stock-option 

orders or how they may be executed. 

Execution of all conforming and 

nonconforming complex orders, 

including stock-option orders, will 

continue to protect Priority Customer 

interest on the Exchange. All stockoption orders (both conforming and 

nonconforming) must satisfy the criteria 

set forth in the definitions of stockoption orders in Rule 1.1 (for open 

outcry processing) and 5.33(b) (for 

electronic processing), which are 

described above. Additionally, all stockoption orders must comply with the 

Qualified Contingent Trade (‘‘QCT’’) 

exemption.31 The Exchange represents 

that its surveillances incorporate stockoption orders with all ratios, including 

nonconforming ratios. 

The proposed rule change will further 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system, as it is 

similar to the Rules of at least one other 

options exchange.32

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 the proposed rule change applies 

equally to all Trading Permit Holders 

(‘‘TPHs’’). Therefore, any TPH may 

submit conforming and nonconforming 

stock-option orders for open outcry or 

electronic processing, which will all be 

handled by the Exchange in a uniform 

manner. Further, the Exchange’s 

proposal will continue to protect 

Priority Customer interest on the 

Exchange. 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on intermarket competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act, 

as it has no impact on the requirements 

for stock-option orders or how they may 

be executed. As discussed above, the 

proposed rule change merely updates 

certain rule provisions it inadvertently 

did not update in connection with a 

previous rule change. Additionally, the 

proposed rule change is consistent with 

the offering of at least one other options 

exchange.33 The Exchange believes 

availability of conforming and 

nonconforming complex orders, 

including stock-option orders, may 

promote competition, as it provides 

investors with multiple venues at which 

to electronically execute these orders, 

giving investors greater flexibility and 

choice of where to send their orders. 

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) of the Act 34 and Rule 19b– 

4(f)(6) thereunder.35

A proposed rule change filed under 

Rule 19b–4(f)(6) 36 normally does not 

become operative prior to 30 days after 

the date of the filing. However, Rule 

19b–4(f)(6)(iii) 37 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 30-day 

operative delay to allow the Exchange to 

make clear in its rules that nonconforming ratio stock-option orders in 

classes determined by the Exchange are 

eligible for electronic processing. The 

Exchange notes that another options 

exchange currently allows nonconforming ratio stock-option orders to 

trade electronically.38 Accordingly, the 

proposal will provide investors with an 

additional venue for trading nonconforming ratio stock-option orders 

electronically. The proposal also adopts 

definitions of ‘‘conforming complex 

order’’ and ‘‘non-conforming complex 

order’’ and incorporates these 

definitions into the Exchange’s rules. 

The ratio requirements in the proposed 

definitions of conforming complex order 

and non-conforming complex order are 

consistent with the requirements in 

defined terms used by another options 

exchange.39 As discussed above, the 

Exchange states that the permissible 

execution prices for stock-option orders 

with conforming and nonconforming 

ratios are consistent with the 

permissible execution prices for 

conforming and nonconforming 

complex orders with only option 

components, and will continue to 

protect Priority Customer interest on the 

Exchange. 

The Commission finds that waiving 

the 30-day operative delay is consistent 

with the protection of investors and the 

public interest. The proposal will 

provide investors with an additional 

venue for the electronic trading of 

nonconforming, as well as conforming, 

stock-option orders. In addition, the 

proposal adds to the Exchange’s rules 


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Federal Register / Vol. 88, No. 188 / Friday, September 29, 2023 / Notices 67393 

40See MIAX Rules 518(a)(8) and (a)(16). 

41The permissible execution prices for stockoptions orders currently are addressed in Cboe 

Rules 5.33(f)(2)(B)(ii) and 5.85(b)(3). 

42For purposes only of waiving 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). 43 17 CFR 200.30–3(a)(12), (59). 

definitions of conforming complex order 

and nonconforming complex order that 

are consistent with defined terms used 

on another options exchange.40 The 

proposal incorporates the proposed 

definitions of conforming and 

nonconforming complex order into the 

Exchange’s rules, including Exchange 

Rules 5.33(f)(2) and 5.85(b), and adds 

new Exchange Rules 5.33(f)(2)(b)(v) and 

5.85(b)(4) and (5) to specifically address 

the permissible execution prices for 

stock-option orders, but makes no 

substantive changes to the permissible 

execution prices for complex order or 

stock-option orders.41 Accordingly, the 

proposal raises no new or novel 

regulatory issues. For these reasons, the 

Commission designates the proposal 

operative upon filing.42

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 

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 (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

CBOE–2023–052 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–2023–052. 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 (https://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 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–CBOE–2023–052 and should be 

submitted on or before October 20, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.43

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–21346 Filed 9–28–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–636, OMB Control No. 

3235–0679] 

Submission for OMB Review; 

Comment Request; Extension: Form 

PF and Rule 204(b)–1 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736. 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission 

(‘‘Commission’’) has submitted to the 

Office of Management and Budget a 

request for extension of the previously 

approved collection of information 

discussed below. 

Rule 204(b)–1 (17 CFR 275.204(b)–1) 

under the Investment Advisers Act of 

1940 (15 U.S.C. 80b–1 et seq.) 

implements sections 404 and 406 of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act (the ‘‘DoddFrank Act’’) by requiring private fund 

advisers that have at least $150 million 

in private fund assets under 

management to report certain 

information regarding the private funds 

they advise on Form PF. These advisers 

are the respondents to the collection of 

information. 

Form PF is designed to facilitate the 

Financial Stability Oversight Council’s 

(‘‘FSOC’’) monitoring of systemic risk in 

the private fund industry and to assist 

FSOC in determining whether and how 

to deploy its regulatory tools with 

respect to nonbank financial companies. 

The Commission and the Commodity 

Futures Trading Commission may also 

use information collected on Form PF in 

their regulatory programs, including 

examinations, investigations and 

investor protection efforts relating to 

private fund advisers. 

Form PF divides respondents into two 

broad groups, Large Private Fund 

Advisers and smaller private fund 

advisers. ‘‘Large Private Fund Advisers’’ 

are advisers with at least $1.5 billion in 

assets under management attributable to 

hedge funds (‘‘large hedge fund 

advisers’’), advisers that manage 

‘‘liquidity funds’’ and have at least $1 

billion in combined assets under 

management attributable to liquidity 

funds and registered money market 

funds (‘‘large liquidity fund advisers’’), 

and advisers with at least $2 billion in 

assets under management attributable to 

private equity funds (‘‘large private 

equity fund advisers’’). All other 

respondents are considered smaller 

private fund advisers. 

The Commission estimates that most 

filers of Form PF have already made 

their first filing, and so the burden 

hours applicable to those filers will 

reflect only ongoing burdens, and not 

start-up burdens. Accordingly, the 

Commission estimates the total annual 

reporting and recordkeeping burden of 

the collection of information for each 

respondent is as follows: 

(a) For smaller private fund advisers 

making their first Form PF filing, an 

estimated amortized average annual 

burden of 13 hours for each of the first 

three years 

(b) for smaller private fund advisers 

that already make Form PF filings, an 

estimated amortized average annual 


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