29848 Federal Register / Vol. 83, No. 123 / Tuesday, June 26, 2018 / Notices 

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). 

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

6 15 U.S.C. 78f(b)(5). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83476; File No. SR–CBOE– 

2018–044] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Clarify the SPX Select 

Market-Maker Program 

June 20, 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 June 8, 

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 amend its 

Fees Schedule relating to the SPX Select 

Market-Maker Program. 

The text of the proposed rule change 

is also available on the Exchange’s 

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

CBOE/CBOELegalRegulatory

Home.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 is proposing to clarify 

text in its Fees Schedule relating to the 

SPX Select Market-Maker (‘‘SMM’’) 

Program. By way of background, the 

Exchange recently established a 

financial incentive program for SPX 

SMMs, which provides that any 

appointed SPX SMM will receive a 

monthly waiver of the cost of one 

Market-Maker Trading Permit and one 

SPX Tier Appointment provided that 

the SMM satisfies a heightened quoting 

standard for that month, which standard 

is set forth in Footnote 49 of the Fees 

Schedule. Footnote 49 currently 

provides that an SMM will receive the 

monthly Trading Permit and SPX Tier 

Appointment waiver if it (1) provides 

continuous electronic quotes in 95% of 

all SPX series 90% of the time in a given 

month, (2) submits opening quotes that 

are no wider than the Opening 

Exchange Prescribed Width (‘‘OEPW’’) 

within one minute of the initiation of an 

opening rotation in any series that is not 

open due to the lack of a qualifying 

quote, on all trading days, to ensure 

electronic quotes on the open that allow 

the series to open, (3) submits opening 

quotes that are no wider than the OEPW 

quote by 8:00 a.m. (CT) on volatility 

settlement days and (4) provides quotes 

for the end-of-month fair value closing 

rotation on a rotating basis. 

The Exchange proposes to clarify the 

criteria currently set forth in the third 

prong of the heightened quoting 

standard, described above. Specifically, 

the Exchange proposes to add text that 

explicitly provides that to satisfy the 

third prong, an SMM must submit 

opening quotes that are no wider than 

the OEPW quote by 8:00 a.m. CST on 

volatility ‘‘index derivative’’ settlement 

days ‘‘in the SPX series that expire in 

the month used to calculate the 

settlement value for expiring volatility 

index derivatives.’’ The Exchange notes 

that this prong was included as part of 

the heightened quoting standard to 

encourage SMM participation prior to 

the opening on volatility index 

derivative settlement days to increase 

liquidity in the SPX series used to 

calculate the settlement value, which is 

desirable to ensure these series open at 

competitive prices on expiration days 

for volatility index derivatives and thus 

ensure a fair and orderly opening and 

settlement process. While liquidity is 

important to open all series on the 

Exchange, given the potential impact on 

the exercise settlement value 

determined for expiring volatility index 

derivatives, the Exchange believes it is 

appropriate to ensure a fair and orderly 

opening of the series used to calculate 

the exercise settlement value. The 

Exchange calculates the settlement 

value for expiring volatility index 

derivatives using the opening pricings 

of SPX options that expire 30 days later. 

All other SPX series are not used by the 

Exchange to determine the exercise 

settlement value. As such, the Exchange 

doesn’t believe that it is appropriate to 

require SMMs to submit opening quotes 

that are no wider than the OEPW by 

8:00 a.m. (CT) on volatility index 

derivative settlement days in all SPX 

options series, if only a subset of SPX 

options series are used in the settlement 

value calculation. In order to alleviate 

any confusion, the Exchange wishes to 

make clear that the third prong, as 

originally written, does not encompass 

all SPX options series. Rather, the third 

prong requires only the submission of 

opening quotes prior to 8:00 a.m. CT on 

volatility index derivative settlement 

days that are no wider than the OEPW 

in the series that expire in the month 

used to calculate the volatility index 

derivative settlement value. With 

respect to the remaining SPX options 

series, the Exchange notes that SMMs 

already are required pursuant to prong 

2 to submit opening quotes that are no 

wider than the OEPW within one 

minute of the initiation of an opening 

rotation in any series that is not open 

due to the lack of a qualifying quote, on 

all trading days, to ensure electronic 

quotes on the open that allow the series 

to open. 

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 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 83, No. 123 / Tuesday, June 26, 2018 / Notices 29849 

7 15 U.S.C. 78f(b)(4). 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(6). Rule 19b–4(f)(6)(iii) 

requires the Exchange to provide the Commission 

with written notice of its intent to file the proposed 

rule change, along with a brief description and the 

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 

asked the Commission to waive this requirement. 

10 17 CFR 240.19b–4(f)(6). 

11 17 CFR 240.19b–4(f)(6)(iii). 

12For 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). 

investors and the public interest. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

Section 6(b)(4) of the Act,7 which 

requires that Exchange rules provide for 

the equitable allocation of reasonable 

dues, fees, and other charges among its 

Trading Permit Holders and other 

persons using its facilities. 

The Exchange believes clarifying the 

third prong in Footnote 49 helps avoid 

confusion by making clear which SPX 

series are subject to the quoting criteria 

in the third prong of the SMM heighted 

quoting standard. The alleviation of 

confusion removes impediments to, and 

perfects the mechanism of, a free and 

open market and a national market 

system and protects investors and the 

public interest. Additionally, the 

Exchange believes that the proposed 

clarification in Footnote 49 is 

reasonable because the third prong is 

meant to specifically address liquidity 

on volatility index derivative settlement 

days that ensure a fair and orderly 

opening and settlement process and not 

address liquidity in SPX options series 

generally. 

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 intramarket or 

intermarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed clarification is intended to 

make clear in the Fees Schedule which 

SPX options series are subject to the 

criteria contained in the third prong of 

the heightened quoting standard in 

order to maintain transparency in the 

rules and alleviate confusion. The 

proposed change also applies to SPX, 

which is only traded on Cboe Options. 

The Exchange believes the proposed 

change therefore does not raise any 

competitive issues. 

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 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 8 and Rule 19b– 

4(f)(6) thereunder.9

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 the proposal may 

become operative immediately upon 

filing. According to the Exchange, 

without the waivers, the Fees Schedule 

would reflect a quoting standard that 

may be confusing to SPX SMMs. The 

Commission hereby waives the prefiling 

requirement and finds that waiver of the 

operative delay is consistent with the 

protection of investors and the public 

interest. In particular, the proposal does 

not raise any new or novel issues, and 

waiver of the prefiling requirement and 

operative delay will allow to the 

Exchange to immediately clarify the 

operation of its SPX Select MarketMaker Program. Therefore, the 

Commission hereby waives the prefiling 

requirement and the operative delay and 

designates the proposal operative upon 

filing.12

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CBOE–2018–044 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–2018–044. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–CBOE–2018–044 and 

should be submitted on or before July 

17, 2018. 


sradovich on DSK3GMQ082PROD with NOTICES
29850 Federal Register / Vol. 83, No. 123 / Tuesday, June 26, 2018 / Notices 

13 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78q(d). 

2 17 CFR 240.17d–2. 

3 15 U.S.C. 78s(g)(1). 

4 15 U.S.C. 78q(d). 

5 15 U.S.C. 78s(g)(2). 

6 15 U.S.C. 78q(d)(1). 

7See Securities Act Amendments of 1975, Report 

of the Senate Committee on Banking, Housing, and 

Urban Affairs to Accompany S. 249, S. Rep. No. 94– 

75, 94th Cong., 1st Session 32 (1975). 

8 17 CFR 240.17d–1 and 17 CFR 240.17d–2, 

respectively. 

9See Securities Exchange Act Release No. 12352 

(April 20, 1976), 41 FR 18808 (May 7, 1976). 

10See Securities Exchange Act Release No. 12935 

(October 28, 1976), 41 FR 49091 (November 8, 

1976). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–13615 Filed 6–25–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Submission for OMB Review; 

Comment Request 

Upon Written Request Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

Extension: 

Form F–X, SEC File No. 270–336, OMB 

Control No. 3235–0379 

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 this 

request for extension of the previously 

approved collection of information 

discussed below. 

Form F–X (17 CFR 239.42) is used to 

appoint an agent for service of process 

by Canadian issuers registering 

securities on Forms F–7, F–8, F–9 or F– 

10 under the Securities Act of 1933 (15 

U.S.C. 77a et seq.), or filing periodic 

reports on Form 40–F under the 

Exchange Act of 1934 (15 U.S.C. 78a et 

seq.). The information collected must be 

filed with the Commission and is 

publicly available. We estimate it takes 

approximately 2 hours per response to 

prepare Form F–X and the information 

is filed by approximately 114 

respondents for a total annual reporting 

burden of 228 hours (2 hours per 

response × 114 responses). 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid 

control number. 

The public may view the background 

documentation for this information 

collection at the following website, 

www.reginfo.gov. Comments should be 

directed to: (i) Desk Officer for the 

Securities and Exchange Commission, 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Room 10102, New Executive 

Office Building, Washington, DC 20503, 

or by sending an email to: Shagufta_

Ahmed@omb.eop.gov; and (ii) Pamela 

Dyson, Director/Chief Information 

Officer, Securities and Exchange 

Commission, c/o Remi Pavlik-Simon, 

100 F Street NE, Washington, DC 20549 

or send an email to: PRA_Mailbox@

sec.gov. Comments must be submitted to 

OMB within 30 days of this notice. 

Dated: June 21, 2018. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–13686 Filed 6–25–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83477; File No. 4–709] 

Program for Allocation of Regulatory 

Responsibilities Pursuant to Rule 17d– 

2; Notice of Filing and Order 

Approving and Declaring Effective an 

Amended Plan for the Allocation of 

Regulatory Responsibilities Between 

the Financial Industry Regulatory 

Authority, Inc. and BOX Options 

Exchange LLC 

June 20, 2018. 

Notice is hereby given that the 

Securities and Exchange Commission 

(‘‘Commission’’) has issued an Order, 

pursuant to Section 17(d) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 approving and declaring 

effective an amendment to the plan for 

allocating regulatory responsibility 

(‘‘Plan’’) filed on June 13, 2018, 

pursuant to Rule 17d–2 of the Act,2 by 

the Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) and BOX 

Options Exchange LLC (‘‘BOX’’) 

(collectively, ‘‘Participating 

Organizations’’ or ‘‘parties’’). This 

agreement amends and restates the 

agreement entered into between FINRA 

and BOX on March 2, 2017, entitled 

‘‘Agreement Between Financial Industry 

Regulatory Authority, Inc. and BOX 

Options Exchange LLC Pursuant to Rule 

17d–2 under the Securities Exchange 

Act of 1934,’’ and any subsequent 

amendments thereafter. 

I. Introduction 

Section 19(g)(1) of the Act,3 among 

other things, requires every selfregulatory organization (‘‘SRO’’) 

registered as either a national securities 

exchange or national securities 

association to examine for, and enforce 

compliance by, its members and persons 

associated with its members with the 

Act, the rules and regulations 

thereunder, and the SRO’s own rules, 

unless the SRO is relieved of this 

responsibility pursuant to Section 

17(d) 4 or Section 19(g)(2) 5 of the Act. 

Without this relief, the statutory 

obligation of each individual SRO could 

result in a pattern of multiple 

examinations of broker-dealers that 

maintain memberships in more than one 

SRO (‘‘common members’’). Such 

regulatory duplication would add 

unnecessary expenses for common 

members and their SROs. 

Section 17(d)(1) of the Act 6 was 

intended, in part, to eliminate 

unnecessary multiple examinations and 

regulatory duplication.7 With respect to 

a common member, Section 17(d)(1) 

authorizes the Commission, by rule or 

order, to relieve an SRO of the 

responsibility to receive regulatory 

reports, to examine for and enforce 

compliance with applicable statutes, 

rules, and regulations, or to perform 

other specified regulatory functions. 

To implement Section 17(d)(1), the 

Commission adopted two rules: Rule 

17d–1 and Rule 17d–2 under the Act.8

Rule 17d–1 authorizes the Commission 

to name a single SRO as the designated 

examining authority (‘‘DEA’’) to 

examine common members for 

compliance with the financial 

responsibility requirements imposed by 

the Act, or by Commission or SRO 

rules.9 When an SRO has been named as 

a common member’s DEA, all other 

SROs to which the common member 

belongs are relieved of the responsibility 

to examine the firm for compliance with 

the applicable financial responsibility 

rules. On its face, Rule 17d–1 deals only 

with an SRO’s obligations to enforce 

member compliance with financial 

responsibility requirements. Rule 17d–1 

does not relieve an SRO from its 

obligation to examine a common 

member for compliance with its own 

rules and provisions of the federal 

securities laws governing matters other 

than financial responsibility, including 

sales practices and trading activities and 

practices. 

To address regulatory duplication in 

these and other areas, the Commission 

adopted Rule 17d–2 under the Act.10

Rule 17d–2 permits SROs to propose 


sradovich on DSK3GMQ082PROD with NOTICES