44938 Federal Register / Vol. 83, No. 171 / Tuesday, September 4, 2018 / Notices 

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

2 17 CFR 240.19b–4. 

3Paragraph (a) of Rule 6.49 (Transactions Off the 

Exchange) generally requires transactions of option 

contracts listed on the Exchange for a premium in 

excess of $1.00 to be effected on the floor of the 

Exchange or on another exchange. 4The Exchange proposes to move the provision 

in Interpretation and Policy .03 that states the onfloor transfer procedure is not to be used repeatedly 

or routinely in circumvention of the normal auction 

market process to proposed paragraph (g), as that 

provision applies to both the current on-floor and 

off-floor position transfer procedures. 

5See Exchange Act Release No. 36647 (December 

28, 1995), 61 FR 566 (January 8, 1996) (Order 

Approving and Notice of Filing and Order Granting 

Accelerated Approval of Amendments No. 1 and 2 

to a Proposed Rule Change Relating to the Transfer 

of Positions on the Floor of the Exchange in Cases 

of Dissolution and other Situations) (SR–CBOE–95– 

36). 

6 Id. Among other restrictions, repeated and 

frequent use of the on-floor procedure in Rule 

6.49A by a TPH is not permitted. 

7 Id. 

8See, e.g., Nasdaq OMX PHLX LLC (‘‘Phlx’’) 

1058. 

9The Exchange notes that other options 

exchanges have adopted off-floor position transfer 

procedures based on, and substantially similar to, 

the Exchange’s procedure in Rule 6.49A(a)(1). See, 

e.g., Nasdaq OMX PHLX LLC (‘‘Phlx’’) Rule 1058; 

and NYSE Arca, Inc. (‘‘Arca’’) Rule 6.78–O(d). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83968; File No. SR–CBOE– 

2018–060] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing of a 

Proposed Rule Change To Amend 

Exchange Rule 6.49A, Transfer of 

Positions 

August 28, 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 August 

16, 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, II, and III 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 

Rule 6.49A to delete the provisions 

related to on-floor position transfers, 

amend the permissible reasons for and 

procedures related to off-floor position 

transfers, and make other 

nonsubstantive changes. 

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 Exchange proposes to amend 

Rule 6.49A to delete the provisions 

related to on-floor position transfers, 

amend the permissible reasons for and 

procedures related to off-floor position 

transfers, and make other 

nonsubstantive changes. Rule 6.49A 

specifies the circumstances under 

which Trading Permit Holders may 

effect transfers of positions, both on and 

off the trading floor, notwithstanding 

the prohibition in Rule 6.49(a).3

On-Floor Transfers 

Rule 6.49A(a)(2) permits certain 

position transfers to occur on the floor 

of the exchange or on another options 

exchange. The procedures for such onfloor position transfers are set forth in 

Rule 6.49A(b) and (c), as well as 

Interpretations and Policies .01 through 

.03. The Exchange no longer wants to 

make available on-floor transfers of 

positions, so the proposed rule change 

deletes paragraphs (a)(2), (b), and (c), 

and Interpretations and Policies .01 

through .03 4 from Rule 6.49A. The onfloor position transfer procedure is 

administratively burdensome on the 

Exchange, and is currently used by 

Trading Permit Holders on a limited 

basis. As the Exchange noted when the 

rule was adopted, the Exchange’s ‘‘onfloor’’ procedure was intended to help 

ensure that Trading Permit Holders with 

a need to transfer positions in bulk as 

part of a sale or disposition of all or 

substantially all of a Trading Permit 

Holder’s assets or options positions 

were able to get the best possible price 

for the positions while also ensuring 

that other Trading Permit Holders have 

an adequate opportunity to make bids 

and offers on the positions that are 

being transferred.5 In addition, the 

Exchange noted the ‘‘on-floor’’ position 

transfer procedure could be used by 

Market-Makers that, for reasons other 

than a forced liquidation, such as an 

extended vacation, wished to liquidate 

their entire, or nearly their entire, open 

positions in a single set of transactions, 

subject to certain restrictions.6

For example, the Exchange’s on-floor 

transfer of positions rule was also 

intended to address the common 

situation in which a Designated Primary 

Market-Maker (‘‘DPM’’) sold its business 

or in which a Market-Maker, for reasons 

other than a forced liquidation, such as 

an extended vacation, wished to 

liquidate its entire, or nearly entire, 

position in a single set of transactions.7

Currently, because DPMs have been 

largely consolidated in the hands of 

firms rather than individuals, such 

transfers are, for the most part 

unnecessary; if an individual takes an 

extended vacation, another member of 

the firm handles the firm’s book. 

Accordingly, the Exchange believes that 

the on-floor transfer of positions 

procedure no longer serves the uses for 

which is was originally adopted. The 

Exchange also notes that at least one 

other options exchange with a trading 

floor and a transfer of positions rule 

does not offer an on-floor transfer 

procedure.8

Off-Floor Position Transfers 

Current Rule 6.49A(a)(1) lists the 

circumstances in which Trading Permit 

Holders may transfer their positions off 

the floor. The circumstances currently 

listed include: (i) The dissolution of a 

joint account in which the remaining 

Trading Permit Holder assumes the 

positions of the joint account; (ii) the 

dissolution of a corporation or 

partnership in which a former nominee 

of the corporation or partnership 

assumes the positions; (iii) positions 

transferred as part of a Trading Permit 

Holder’s capital contribution to a new 

joint account, partnership, or 

corporation; (iv) the donation of 

positions to a not-for-profit corporation; 

(v) the transfer of positions to a minor 

under the Uniform Gifts to Minor law; 

and (vi) a merger or acquisition where 

continuity of ownership or management 

results.9


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10 It is possible for positions transfers to occur 

between two Non-Trading Permit Holders. For 

example, one Non-Trading Permit Holder may 

transfer positions on the books of a Clearing 

Trading Permit Holder to another Non-Trading 

Permit Holder pursuant to the proposed rule. 

11Proposed paragraph (h) also clarifies that the 

off-floor transfer procedure only applies to 

positions in options listed on the Exchange, and 

that transfers of non-Exchange-listed options and 

other financial instruments are not governed by 

Rule 6.49A. 

12See proposed subparagraphs (a)(5) and (7). 

13See proposed paragraph (h). 

14See Cboe Options Regulatory Circular RG03– 

62. Note Rule 4.22 was not referenced in that 

circular, as it did not exist at that time. However, 

it contains similar language regarding corrections of 

errors as Rule 4.6, and therefore the Exchange 

believes it is appropriate to include in the proposed 

rule change. The proposed rule change is also 

similar to Cboe Futures Exchange, LLC (‘‘CFE’’) 

Rule 420(a)(i). 

15Rule 1.1(ff) defines ‘‘Person’’ as an individual, 

partnership (general or limited), joint stock 

company, corporation, limited liability company, 

trust or unincorporated organization, or any 

governmental entity or agency or political 

subdivision thereof. 

16The proposed rule change is similar to CFE 

Rule 420(a)(ii). 

17 Various rules (for example, Regulation SHO in 

certain circumstances) require accounts to be 

maintained separately, and the proposed rule 

change is consistent with those rules. 

18This refers to the consolidation of entire 

accounts (e.g., combining two separate accounts 

(including the positions in each account into a 

single account)). 

19See, e.g., Phlx Rule 1058(a)(7); and Arca Rule 

6.78–O(d)(1)(vii). 

20The proposed rule change is similar to CFE 

Rule 420(a)(iii). 

21See proposed paragraph (g). 

22See, e.g., Phlx Rule 1058(a)(1) through (6); and 

Arca Rule 6.78–O(d)(1)(i) through (vi). 

23See Cboe Options Regulatory Circular RG03– 

62. For example, positions may not transfer from a 

customer, joint back office, or firm account to a 

Market-Maker account. However, positions may 

transfer from a Market-Maker account to a 

customer, joint back office, or firm account 

(assuming no netting of positions occurs). 

The Exchange proposes to add 

clarifying language to the first sentence 

of Rule 6.49A(a) to state that existing 

positions in options listed on the 

Exchange of a Trading Permit Holder or 

of a Non-Trading Permit Holder that are 

to be transferred on, from, or to the 

books of a Clearing Trading Permit 

Holder may be transferred off the 

Exchange (an ‘‘off-floor transfer’’) if the 

off-floor transfer involves one of the 

events listed in the Rule.10 The 

proposed rule change clarifies that Rule 

6.49A does not apply to products other 

than options listed on the Exchange, 

consistent with the Exchange’s other 

trading rules.11 It also clarifies that a 

Trading Permit Holder must be on one 

side of the transfer. The proposed rule 

change also clarifies that positions a 

Trading Permit Holder is transferring or 

receiving are held in the account of a 

Clearing Trading Permit Holder. This 

language is consistent with how offfloor transfers are currently effected. 

The proposed rule change also clarifies 

that both Trading Permit Holders and 

non-Trading Permit Holders may effect 

off-floor transfers, except under 

specified circumstances in which only a 

Trading Permit Holder may effect an offfloor transfer.12

The Exchange notes off-floor transfers 

of positions in Exchange-listed options 

may also be subject to applicable laws, 

rules, and regulations, including rules of 

other self-regulatory organizations.13

Except as explicitly provided in the 

proposed rule text, the proposed rule 

change is not intended to exempt offfloor position transfers from any other 

applicable rules or regulations, and 

proposed paragraph (h) makes this clear 

in the rule. 

The proposed rule change adds four 

events where an off-floor transfer would 

be permitted to occur. 

• Proposed subparagraph (a)(1) 

permits an off-floor transfer to occur if 

it, pursuant to Rule 4.6 or 4.22, is an 

adjustment or transfer in connection 

with the correction of a bona fide error 

in the recording of a transaction or the 

transferring of a position to another 

account, provided that the original trade 

documentation confirms the error. This 

proposed rule change codifies previous, 

long-standing Exchange guidance 

regarding what off-floor transfers are 

permissible and will permit transactions 

to be properly recorded in the originally 

intended accounts.14

• Proposed subparagraph (a)(2) 

permits an off-floor transfer if it is a 

transfer of positions from one account to 

another account where there is no 

change in ownership involved (i.e., the 

accounts are for the same Person 15), 

provided the accounts are not in 

separate aggregation units or otherwise 

subject to information barrier or account 

segregation requirements.16 The 

proposed rule change provides market 

participants with flexibility to maintain 

positions in accounts used for the same 

trading purpose in a manner consistent 

with their businesses. Such transfers are 

not intended to be transactions among 

different market participants, as there 

would be no change in ownership 

permitted under the provision, and 

would also not permit transfers among 

different trading units for which 

accounts are otherwise required to be 

maintained separately.17

• Proposed subparagraph (a)(3) 

similarly permits an off-floor transfer if 

it is a consolidation of accounts 18 where 

no change in ownership is involved. 

This proposed rule change is similar to 

rules of other options exchanges.19

• Proposed subparagraph (a)(10) 

permits an off-floor transfer if it is a 

transfer of positions through operation 

of law from death, bankruptcy, or 

otherwise.20 This provision is consistent 

with applicable laws, rules, and 

regulations that legally require transfers 

in certain circumstances. This proposed 

rule change is consistent with the 

purposes of other circumstances in the 

current rule, such as the transfer of 

positions to a minor or dissolution of a 

corporation. 

The Exchange believes these proposed 

events have similar purposes as those in 

the current rule, which is to permit 

market participants to move positions 

from one account to another and to 

permit transfers upon the occurrence of 

significant, non-recurring events.21 As 

noted above, the proposed rule change 

is consistent with current Exchange 

guidance or rules of other self-regulatory 

organizations. 

The proposed rule change renumbers 

current subparagraphs (a)(1)(i) through 

(v) to be proposed subparagraphs (a)(5) 

through (9) and moves current 

subparagraph (a)(1)(vi) to proposed 

subparagraph (a)(4), with 

nonsubstantive changes. These 

permissible circumstances for off-floor 

transfers are consistent with the rules of 

other options exchanges.22

Proposed paragraph (b) codifies 

Exchange guidance regarding certain 

restrictions on permissible off-floor 

transfers related to netting of open 

positions and to margin and haircut 

treatment. Proposed subparagraph (b)(1) 

states, unless otherwise permitted by 

Rule 6.49A, when effecting an off-floor 

transfer pursuant to paragraph (a), no 

position may net against another 

position (‘‘netting’’), and no position 

transfer may result in preferential 

margin or haircut treatment.23 Netting 

occurs when long positions and short 

positions in the same series ‘‘offset’’ 

against each other, leaving no or a 

reduced position. For example, if a 

Trading Permit Holder wanted to 

transfer 100 long calls to another 

account that contained short calls of the 

same options series as well as other 

positions, even if the transfer is 

permitted pursuant to one of the 10 

permissible events listed in the Rule, 

the Trading Permit Holder could not 

transfer the offsetting series, as they 

would net against each other and close 

the positions. 

However, netting is permitted for offfloor transfers on behalf of a MarketMaker account for transactions in 

multiply listed options series on 

different options exchanges, but only if 

the Market-Maker nominees are trading 


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24 Id. 

25Phlx Rule 1058(c) requires position transfers to 

occur at the same prices that appear on the books 

of the transferring member. 

26For example, for a transfer that occurs on a 

Tuesday, the transfer price may be based on the 

closing market price on Monday. 

27The proposed rule change is similar to CFE 

Rule 420(c). 

28This notice provision applies only to transfers 

involving a Trading Permit Holder’s positions and 

not to positions of Non-Trading Permit Holder 

parties, as they are not subject to the Rules. In 

addition, no notice would be required to effect offfloor transfers to correct bona fide errors pursuant 

to proposed subparagraph (a)(1). 

29See, e.g., Phlx Rule 1058(b) and (c); and Arca 

Rule 6.78–O(d)(2). 

30See, e.g., Phlx Rule 1058(c); and Arca Rule 

6.78–O(c). 

31Similar to the rules of other exchanges, the 

proposed rule change also lets a designee of the 

Exchange president grant an exemption. See, e.g., 

Arca Rule 6.78–O(f). 

for the same Trading Permit Holder 

organization, and the options 

transactions on the different options 

exchanges clear into separate exchangespecific accounts because they cannot 

easily clear into the same Market-Maker 

account at the Clearing Corporation. In 

such instances, all Market-Maker 

positions in the exchange-specific 

accounts for the multiply listed class 

would be automatically transferred on 

their trade date into one central MarketMaker account (commonly referred to as 

a ‘‘universal account’’) at the Clearing 

Corporation.24 Positions cleared into a 

universal account would automatically 

net against each other. Options 

exchanges permit different naming 

conventions with respect to MarketMaker account acronyms (for example, 

lettering versus numbering and number 

of characters), which are used for 

accounts at the Clearing Corporation. A 

Market-Maker may have a nominee with 

an appointment in class XYZ on Cboe 

Options, and have another nominee 

with an appointment in class XYZ on 

Phlx, but due to account acronym 

naming conventions, those nominees 

may need to clear their transactions into 

separate accounts (one for Cboe Options 

transactions and another for Phlx 

transactions) at the Clearing Corporation 

rather into a universal account (in 

which account the positions may net). 

The proposed rule change permits offfloor transfers from these separate 

exchange-specific accounts into the 

Market-Maker’s universal account in 

this circumstance to achieve this 

purpose. 

Proposed paragraph (c) states the 

transfer price, to the extent it is 

consistent with applicable laws, rules, 

and regulations, including rules of other 

self-regulatory organizations, and tax 

and accounting rules and regulations, at 

which an off-floor transfer is effected 

may be: 

(1) The original trade prices of the 

positions that appear on the books of the 

trading Clearing Trading Permit Holder, 

in which case the records of the transfer 

must indicate the original trade dates for 

the positions; 25 provided, transfers to 

correct errors bona fide errors pursuant 

to proposed subparagraph (a)(1) must be 

transferred at the correct original trade 

prices; 

(2) mark-to-market prices of the 

positions at the close of trading on the 

transfer date; 

(3) mark-to-market prices of the 

positions at the close of trading on the 

trade date prior to the transfer date; 26 or 

(4) the then-current market price of 

the positions at the time the off-floor 

transfer is effected.27

This proposed rule change provides 

market participants that effect off-floor 

transactions with flexibility to select a 

transfer price based on the 

circumstances of the transfer and their 

business. However, for corrections of 

bona fide errors, because those transfers 

are necessary to correct processing 

errors that occurred at the time of 

transaction, those transfers would occur 

at the original transaction price, as the 

purpose of the transfer is to create the 

originally intended result of the 

transaction. 

Proposed paragraph (d) requires a 

Trading Permit Holder and its Clearing 

Trading Permit Holder (to the extent 

that the Trading Permit Holder is not 

self-clearing) to submit to the Exchange, 

in a manner determined by the 

Exchange, written notice prior to 

effecting an off-floor transfer from or to 

the account of a Trading Permit 

Holder(s).28 The notice must indicate: 

• The Exchange-listed options 

positions to be transferred; 

• the nature of the transaction; 

• the enumerated provision(s) under 

proposed paragraph (a) pursuant to 

which the positions are being 

transferred; 

• the name of the counterparty(ies); 

• the anticipated transfer date; 

• the method for determined the 

transfer price; and 

• any other information requested by 

the Exchange. 

The proposed notice will ensure the 

Exchange is aware of all off-floor 

transfers so that it can monitor and 

review them (including the records that 

must be retained pursuant to proposed 

paragraph (e)) to determine whether 

they are effected in accordance with the 

Rules. Additionally, requiring notice 

from the Trading Permit Holder(s) and 

its Clearing Trading Permit Holder(s) 

will ensure both parties are in 

agreement with respect to the terms of 

the off-floor transfer. The proposed rule 

change is similar to rules of other 

options exchanges.29 As noted in 

proposed subparagraph (d)(2), receipt of 

notice of an off-floor transfer does not 

constitute a determination by the 

Exchange that the off-floor transfer was 

effected or reported in conformity with 

the requirements of Rule 6.49A. 

Notwithstanding submission of written 

notice to the Exchange, Trading Permit 

Holders and Clearing Trading Permit 

Holders that effect off-floor transfers 

that do not conform to the requirements 

of Rule 6.49A will be subject to 

appropriate disciplinary action in 

accordance with the Rules. 

Similarly, proposed paragraph (e) 

requires each Trading Permit Holder 

and each Clearing Trading Permit 

Holder that is a party to an off-floor 

transfer must make and retain records of 

the information provided in the written 

notice to the Exchange pursuant to 

proposed subparagraph (d)(1), as well as 

information on the actual Exchangelisted options that are ultimately 

transferred, the actual transfer date, and 

the actual transfer price (and the 

original trade dates, if applicable), and 

any other information the Exchange may 

request the Trading Permit Holder or 

Clearing Trading Permit Holder provide. 

The proposed rule change is similar to 

rules of other options exchanges.30

The proposed rule change moves 

current paragraph (d) regarding other 

exemptions to proposed paragraph (f). 

The exemptions permitted by this 

paragraph are those approved by the 

Exchange’s president.31 The proposed 

rule change permits the President or a 

designee to grant an exemption to the 

Rule 6.49(a) prohibition if, in his or her 

judgment, allowing the off-floor transfer 

is necessary or appropriate for the 

maintenance of a fair and orderly 

market and the protection of investors 

and is in the public interest, including 

due to unusual or extraordinary 

circumstances such as the market value 

of the Person’s positions will be 

comprised by having to comply with the 

requirement to trade on the Exchange 

pursuant to the normal auction process 

or, when in the judgment of President 

or his or her designee, market 

conditions make trading on the 

Exchange impractical. The proposed 

rule change updates language consistent 

with the change to only permit off-floor 

transfers. Additionally, the additional 

circumstances in which the President or 


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32 15 U.S.C. 78f(b). 

33 15 U.S.C. 78f(b)(5). 

34 Id. 

a designee may grant an exemption are 

similar to those that the President or a 

designee may consider when taking 

action under emergency conditions 

pursuant to Rule 6.17. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 

and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.32 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 33 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) 34 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange believes that permitting 

the off-floor transfers in very limited 

circumstances such as where there is no 

change in beneficial ownership, to 

contribute to a non-profit corporation, to 

transfer to a minor or a transfer by 

operation of law is reasonable to allow 

a TPH to accomplish certain goals 

efficiently. The rule permits off-floor 

transfers in situations involving 

dissolutions of entities or accounts, for 

purposes of donations, mergers or by 

operation of law. For example, a TPH 

that is undergoing a structural change 

and a one-time movement of positions 

may require a transfer of positions or a 

TPH that is leaving a firm that will no 

longer be in business may require a 

transfer of positions to another firm. 

Also, a TPH may require a transfer of 

positions to make a capital contribution. 

The above-referenced circumstances are 

non-recurring situations where the 

transferor continues to maintain some 

ownership interest or manage the 

positions transferred. By contrast, 

repeated or routine off-floor transfers 

between entities or accounts—even if 

there is no change in beneficial 

ownership as a result of the transfer— 

is inconsistent with the purposes for 

which Rule 6.49A was adopted. 

Accordingly, the Exchange believes that 

such activity should not be permitted 

under the rules and thus, seeks to adopt 

language in proposed paragraph (e) to 

Rule 6.49A that the transfer of positions 

procedures set forth in Rule 6.49A are 

intended to facilitate non-recurring 

movements of positions. 

The Exchange believes that the 

proposed rule change to eliminate the 

on-floor position transfer procedure 

promotes just and equitable principles 

of trade, helps remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and promotes efficient 

administration of the Exchange, as it 

eliminates a complex procedure that is 

of limited use to Trading Permit Holders 

today but still imposes an 

administrative burden on the Exchange. 

The Exchange believes the proposed 

rule change benefits investors, as it adds 

transparency to the Rules by codifying 

certain long-standing guidance 

regarding what types of off-floor 

transfers are permissible. The purpose 

of the additional circumstances in 

which market participants may conduct 

off-floor transfers is consistent with the 

purpose of the circumstances currently 

permitted in Rule 6.49A. Therefore, the 

proposed rule change will provide 

market participants that experience 

these limited, non-recurring events with 

an efficient and effective means to 

transfer positions in these situations. It 

also permits presidential exemptions 

when they are necessary or appropriate 

for the maintenance of a fair and orderly 

market and the protection of investors 

and are in the public interest. The 

Exchange believes the proposed rule 

change regarding permissible transfer 

prices provides market participants with 

flexibility to determine the price 

appropriate for their business, which 

maintain cost bases in accordance with 

normal accounting practices and 

removes impediments to a free and open 

market. 

The proposed rule change requiring 

notice and maintenance of records will 

ensure the Exchange is able to review 

off-floor transfers for compliance with 

the Rules, which prevents fraudulent 

and manipulative acts and practices. 

The requirement to retain records is 

consistent with the requirements of Rule 

17a–3 and 17a–4 under the Act. 

As discussed above, the proposed rule 

change is similar to rules of other 

options exchanges, and thus further 

removes impediments to and perfects 

the mechanism of a free and open 

market. 

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 the proposed 

rule change will impose any burden on 

intramarket competition, as the 

amended off-floor transfer procedure 

will apply to all Trading Permit Holders 

in the same manner. Use of the off-floor 

transfer procedure is voluntary, and all 

Trading Permit Holders may use the 

procedure to transfer position off the 

floor as long as the criteria in the 

proposed rule are satisfied. The current 

on-floor position transfer procedure is of 

limited use to Trading Permit Holders 

today but still imposes an 

administrative burden on the Exchange. 

The proposed elimination of the onfloor position transfer promotes efficient 

administration of the Exchange, as it 

eliminates this complex procedure that 

is limited in application. Market 

participants will still be able to effect 

transactions on the Exchange pursuant 

to the normal auction process if an offfloor transfer is not permissible. 

The proposed rule change also 

provides market participants that 

experience the limited permissible, nonrecurring events with an efficient and 

effective means to transfer positions in 

these situations. The Exchange believes 

the proposed rule change regarding 

permissible transfer prices provides 

market participants with flexibility to 

determine the price appropriate for their 

business, which determine prices in 

accordance with normal accounting 

practices and removes impediments to a 

free and open market. The Exchange 

does not believe the proposed notice 

and record requirements are unduly 

burdensome to market participants, as 

they are similar to requirements in the 

rules of other options exchanges, as 

discussed above. The Exchange believes 

these are reasonable requirements that 

will ensure the Exchange is aware of all 

off-floor transfers so that it can monitor 

and review them to determine whether 

they are effected in accordance with the 

Rules. 

The Exchange does not believe the 

proposed rule change will impose any 

burden on intermarket competition. The 

proposed off-floor position transfer 

procedure is not intended to be a 

competitive trading tool. The Exchange 

does not believe the proposed changes 

to the off-floor position transfer 

procedure are material, as they codify 

certain longstanding guidance and 

clarify the procedure. This procedure is 


sradovich on DSK3GMQ082PROD with NOTICES
44942 Federal Register / Vol. 83, No. 171 / Tuesday, September 4, 2018 / Notices 

35 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3On December 18, 2017, FICC filed the proposed 

rule change as advance notice SR–FICC–2017–805 

with the Commission pursuant to Section 806(e)(1) 

of Title VIII of the Dodd-Frank Wall Street Reform 

and Consumer Protection Act entitled the Payment, 

Clearing, and Settlement Supervision Act of 2010 

(‘‘Clearing Supervision Act’’) and Rule 19b– 

4(n)(1)(i) of the Act (‘‘Advance Notice’’). 12 U.S.C. 

5465(e)(1) and 17 CFR 240.19b–4(n)(1)(i), 

respectively. The Advance Notice was published for 

comment in the Federal Register on January 30, 

2018. In that publication, the Commission also 

extended the review period of the Advance Notice 

for an additional 60 days, pursuant to Section 

806(e)(1)(H) of the Clearing Supervision Act. 12 

U.S.C. 5465(e)(1)(H); Securities Exchange Act 

Release No. 82580 (January 24, 2018), 83 FR 4341 

(January 30, 2018) (SR–FICC–2017–805). On April 

10, 2018, the Commission required additional 

information from FICC pursuant to Section 

806(e)(1)(D) of the Clearing Supervision Act, which 

tolled the Commission’s period of review of the 

Advance Notice until 60 days from the date the 

information required by the Commission was 

received by the Commission. 12 U.S.C. 

5465(e)(1)(D); see 12 U.S.C. 5465(e)(1)(E)(ii) and 

(G)(ii); see Memorandum from the Office of 

Clearance and Settlement Supervision, Division of 

Trading and Markets, titled ‘‘Commission’s Request 

for Additional Information,’’ available at https://

www.sec.gov/rules/sro/ficc-an.htm. On June 28, 

2018, FICC filed Amendment No. 1 to the Advance 

Notice to amend and replace in its entirety the 

Advance Notice as originally filed on December 18, 

2017. Securities Exchange Act Release No. 83744 

(July 31, 2018), 83 FR 38413 (August 6, 2018) (SR– 

FICC–2017–805). FICC submitted a courtesy copy of 

Amendment No. 1 to the Advance Notice through 

the Commission’s electronic public comment letter 

mechanism. Accordingly, Amendment No. 1 to the 

Advance Notice has been publicly available on the 

Commission’s website at https://www.sec.gov/rules/ 

sro/ficc-an.htm since June 29, 2018. On July 6, 

2018, the Commission received a response to its 

request for additional information in consideration 

of the Advance Notice, which, in turn, added a 

further 60-days to the review period pursuant to 

Section 806(e)(1)(E) and (G) of the Clearing 

Supervision Act. 12 U.S.C. 5465(e)(1)(E) and (G); 

see Memorandum from the Office of Clearance and 

Settlement Supervision, Division of Trading and 

Markets, titled ‘‘Response to the Commission’s 

Request for Additional Information,’’ available at 

https://www.sec.gov/rules/sro/ficc-an.htm. The 

Commission did not receive any comments. The 

proposal, as set forth in both the Advance Notice 

and the proposed rule change, each as modified by 

Amendment No. 1, shall not take effect until all 

required regulatory actions are completed. 

4Securities Exchange Act Release No. 82431 

(January 2, 2018), 83 FR 871 (January 8, 2018) (SR– 

FICC–2017–021). 5Securities Exchange Act Release No. 82669 

(February 8, 2018), 83 FR 6653 (February 14, 2018) 

(SR–DTC–2017–021, SR–FICC–2017–021, SR– 

NSCC–2017–017). 

6Securities Exchange Act Release No. 82913 

(March 20, 2018), 83 FR 12997 (March 26, 2018) 

(SR–FICC–2017–021). 

of limited application during unique 

circumstances. Additionally, as 

discussed above, the proposed rule 

change in part is similar to rules of other 

options exchanges. The Exchange 

believes having similar rules related to 

off-floor transfer positions to those of 

other options exchanges will reduce the 

administrative burden on market 

participants of determining whether 

their off-floor transfers comply with 

multiple sets of rules. 

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 written comments on the 

proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the Exchange consents, the Commission 

will: 

A. by order approve or disapprove such 

proposed rule change, or 

B. institute proceedings to determine 

whether the proposed rule change 

should be 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–2018–060 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–2018–060. 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–2018–060 and 

should be submitted on or before 

September 25, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.35

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–19060 Filed 8–31–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83973; File No. SR–FICC– 

2017–021] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Order 

Approving a Proposed Rule Change, 

as Modified by Amendment No. 1, To 

Adopt a Recovery & Wind-Down Plan 

and Related Rules 

August 28, 2018. 

On December 18, 2017, Fixed Income 

Clearing Corporation (‘‘FICC’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) proposed 

rule change SR–FICC–2017–021 

pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder 2 to 

adopt a recovery and wind-down plan 

and related rules.3 The proposed rule 

change was published for comment in 

the Federal Register on January 8, 

2018.4 On February 8, 2018, the 

Commission designated a longer period 

within which to approve, disapprove, or 

institute proceedings to determine 

whether to approve or disapprove the 

proposed rule change.5 On March 20, 

2018, the Commission instituted 

proceedings to determine whether to 

approve or disapprove the proposed 

rule change.6 On June 25, 2018, the 


sradovich on DSK3GMQ082PROD with NOTICES